Watch Out 3D Systems Corporation and Stratasys: This Powerful Team Plans to Develop a 3-D Printer 200 Times Faster and 10 Times Bigger

A partnership agreement was signed last week that appears to have the potential to disrupt the leadership positions of 3D Systems Corporation (NYSE: DDD  ) and Stratasys Ltd. (NASDAQ: SSYS  ) in the 3-D printing space, provide company for ExOne (NASDAQ: XONE  ) and Arcam (NASDAQOTH: AMAVF  ) in the industrial niche of the 3-D printing sector, and competition for voxeljet  (NYSE: VJET  ) in the large build-box space. On Feb. 17, the U.S. Department of Energy's Oak Ridge National Lab and Cincinnati Inc. signed an agreement to develop a 3-D printer that is 200-500 times faster and capable of printing polymer components 10 times larger – up to about one cubic meter in size – than most of today's 3-D printers.

Here's what investors need to know about Uncle Sam's latest foray into the 3-D printing realm:

The partners and the goal
Oak Ridge National Laboratory is the largest science and energy national lab in the DOE's system, and frequently teams with commercial partners. (In fact, it's been teaming with Stratasys since 2012 to develop FDM carbon-fiber-reinforced plastics; FDM stands for "fused deposition modeling," one of Stratasys' two primary 3-D printing technologies.) Cincinnati Inc. is a privately held machine tool manufacturer, based in (you got it) the Cincinnati, Ohio, area. The 115-year-old company's expertise lies in the design and manufacturing of large-scale systems, especially laser cutting systems used in metal fabrication and powdered metal compacting presses used to produce high volume parts for the auto industry.

The goal of this teaming is to speed up the commercialization of a new 3-D printing machine that can print large polymer parts faster and cheaper than current technologies. Providing manufacturers access to such technology is meant to "strengthen domestic manufacturing of highly advanced components for the automotive, aerospace, appliance, robotics and many other industries."

The initial phase of the project involves incorporating 3-D printing technology into the machine base of Cincinnati Inc.'s laser cutting system to create a prototype, large-scale, 3-D printing system. The partners will then integrate a high-speed cutting tool, pellet feed mechanism, and control software into the system to provide additional capabilities. So, it sounds like this system will be able to be more easily integrated into a manufacturing line than most of today's 3-D printers.

This ORNL-Cincinnati Inc. project addresses two primary hurdles that are holding back 3-D printing from making faster inroads into mass manufacturing applications: production speed and size of components that can be made. There are other challenges, as well, such as material limitations, but there's been much progress in that area and more is anticipated.

The competitive space
Beyond the joint goal, investors should note Cincinnati Inc. CEO Andrew Jamison's goal: "Out of this developmental partnership with ORNL, CINCINNATI intends to lead the world in big area additive manufacturing machinery for both prototyping and production."

Certainly, investors in all five of the pure-play, publicly traded 3-D printer manufacturers – 3D Systems Corporation (DDD), Stratasys (SSYS), ExOne (XONE), Arcam (AMAVF), and voxeljet (VJET) – should monitor this project.

There's no doubt that industry juggernaut 3D Systems Corp. has ambitions to be a player in the mass manufacturing realm. In November, 3D Systems Corp. announced that it was partnering with Google on Project Ara. The goal of Project Ara is to create a large-scale 3-D printing manufacturing platform capable of producing customizable open-source modular smartphones. Now, that's "small area" manufacturing, of course, but it's possible that 3D Systems could be eyeing the "big area" (more often referred to as "broad area") manufacturing space, too. It seems likely that Stratasys, which has traditionally been more commercially focused than 3D Systems, could have plans to enter this space, too.

While ExOne and Arcam are both solely involved in the industrial 3-D printing market, neither have plastics capabilities, so there's currently no direct overlap between their printers and Cincinnati Inc.'s planned printer. Additionally, Arcam's not focused on the larger build box space. Voxeljet, on the other hand, does make printers with polymer printing capabilities, and specializes in printers with large build boxes. That said, voxeljet's systems are used to produce plastic components primarily for the commercial, rather than industrial, sector. It would seem that the ORNL-Cincinnati Inc. 3-D printer will likely be using more heavy-duty thermoplastics than voxeljet uses, given that it's targeting the industrial sector.

If ORNL and Cincinnati Inc. are successful with this project, I'd imagine it's almost a sure thing that the company goes on to develop metals printing capabilities for its large-area printer. After all, Cincinnati Inc.'s expertise is largely in producing metal-working machines. 

Foolish final thoughts
A 3-D printer that can produce polymer components for the auto, aerospace, and other industries as large as one cubic meter at speeds 200-500 times faster than most of today's 3-D printers will be a game-changer for the manufacturing industry. Tack "metals printing capabilities" onto that same printer and it should be nothing short of revolutionary for the manufacturing world.

The equipment manufacturer that first successfully introduces such a 3-D printer to the market should do phenomenally well. Conversely, other 3-D printer manufacturers would likely see their growth potential curtailed.

I'll be following this project, and will keep investors up to date. 

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Read/Post Comments (11) | Recommend This Article (17)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 26, 2014, at 2:07 PM, ceberly wrote:

    Beth:

    Why is there no symbol for "Cincinnati Inc?"

    Secondly, as I was seriously considering investing in Stratasys; this sounds like a game-changer if the Federal government is involved; with their endless deep pockets of our money!

    If that is true, is there a way to invest in this, and is that what you are recommending; that it will dwarf the other 3-D printing companies?

    Thank you,

    Cary

  • Report this Comment On February 26, 2014, at 2:15 PM, FoolTheRest wrote:

    Cary,

    "Cincinnati Inc. is a privately held machine tool manufacturer" which is why there is no symbol and not a direct way to invest in this partnership.

    FTR

  • Report this Comment On February 26, 2014, at 2:50 PM, TMFMcKenna wrote:

    FTR,

    Thanks for jumping in so quickly to answer Cary's question! Should be interesting to see if more traditional "subtractive" manufacturers enter the industrial 3-D printing space. I'd expect some more will, and perhaps they'll be a publicly traded one or two.

    Mitsubishi, which is publicly traded (OTC), entered the market with the first hybrid 3-D printer, as I wrote about last month. However, it's such a huge company that its foray into the space will hardly make a dent in its revenue, even if it does fairly well.

    Beth

    Cary,

    The govt. does have deep pockets, which certainly helps speed innovation along.

    Let's say this partnering IS successful. That doesn't mean all the other players will be affected to the same degree. Besides, right now there is room in the market for many companies (though at some point that will surely change). It would seem the best bet is to invest in a company which won't depend upon the large-area industrial space for its success.

    Beth

  • Report this Comment On February 26, 2014, at 3:59 PM, Dawgpac wrote:

    Great article. One to keep an eye on. ORNL, as you mentioned, also works with SSYS and Arcam for that matter. Bodes well for the industry as a whole. Arcam needs to come to market with their FastEBM printers. Recently they announced success with that project and that the results would indeed become available in their next gen machines. NASA also works with Arcam and is looking to develop lighter rocket nozzles, etc. NASA also continues to work on their EBF3 which is wire fed titanium. At first I was concerned that they were moving away from Arcam but they continue to work with them. The EBF3 method is designed solely for space as powder beds and zero gravity are a bad mix. Keep up the great work!

  • Report this Comment On February 26, 2014, at 5:15 PM, lrs777 wrote:

    Article is interesting but lacks critical details. Govt has many partnership agreements with many companies for various reasons. 3-D printing is an important technology, present and future.

    I would not run to invest in Cincinnati Inc.'s until they become public and show real 3-D capability.

    I am long in SSYS, DDD and XONE and I plan to remain that way.

  • Report this Comment On February 26, 2014, at 5:48 PM, wildeweasel wrote:

    "Planning on" and "successful at" are not the same thing and I don't see every mention of competition as a negative for everyone currently in the industry. Call me old fashioned but competition has historically been good for any industry and lack of has caused stagnation and prohibitive prices. Every time I see a click-bait headline like this the article makes me more bullish on 3D printing as a whole.

    I personally hope that HP and others get into the game soon for the advances and royalties that will be paid. Even if some of the early companies do end up failing, which they will, there is still intrinsic value in the companies that will be purchased by the remainder.

  • Report this Comment On February 26, 2014, at 6:03 PM, keelfoot wrote:

    Be careful to not assume too much from the DOE (ORNL) deep pockets. The track record for many (most?) Fed funded projects from this arena is not too good and has been a bottomless pit into which to dump tax dollars in recent years. This agency moves slowly on a good day; or week; or month... well you get the message. This kind of collaboration between industry and the Feds goes a long way to justify the existence of the Agency bureaucracy and looks good in the annual reports that go to Congress. But it has not been shown to be very successful at generating a profit for anyone other than the government contractors who oversee the shuffling of invoices and writing of reports. At least this 3D proposition is not switchgrass fuel or solar energy BS-connected. The private sector is doing better in those arenas (biofuels and solar) and will likely do so in 3D printing as well. Stay put with those who have demonstrated economic success in 3D.

  • Report this Comment On February 26, 2014, at 6:56 PM, TMFMcKenna wrote:

    @Irs 777,

    When announcements like this are made, details are not usually provided. So, you have whatever pertinent details were provided!

    @wildeweasel,

    I fully agree with you that competition is usually a good thing and that "planning on" and "successful at" are two different things. That said, part of my job, as I see it, is bringing news like this (which is not "out there") to the attention of 3D printing investors, so they can "monitor" this project if they choose. Surely, this project won't be a competitive threat to any entity for a while. However, that could well change within a couple years.

    @keelfoot,

    Point very well taken about govt agencies, in general. However, Cincinnati Inc. seems to have quite solid credentials and experience in related areas. So, I don't view this as a moonshot or pie in the sky project like some govt undertakings. Let's also remember that our govt agencies, particularly DARPA, have really helped speed up commercialization of many critical technologies, including how I'm communicating with everyone now.

    Thanks for the comments.

  • Report this Comment On February 26, 2014, at 6:58 PM, ScottCherf wrote:

    Solydra.

  • Report this Comment On February 27, 2014, at 2:23 AM, BillFromNY wrote:

    As much as I have been wanting to get into this new and probably "disruptive" technology, I'm getting pretty cold on the three out there now. I don't think management is particularly brilliant or focused, with SSYS and DDD growing mostly through a bunch of acquisitions that seem at times almost randomly chosen.

    ExOne at the moment seems the safest since it has corrected the most and is pretty well focused in on the industrial sector. It is also a lot cheaper than the other two now and would almost surely be acquired by one of the deeper pocket competitors who are on the way.

    If you could to Seeking Alpha and search on these companies, you can find three or four recent articles that are on the whole worth reading.

  • Report this Comment On February 27, 2014, at 1:19 PM, 00dennis wrote:

    what about HP? they have announced getting into this technology.

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