Say Goodbye to "Made in China"

Like clockwork, it seems that a disruptive technology comes along every decade and offers the potential to fundamentally change the world. The personal computer began to make its way into households in the 1980s, the 1990s brought the Internet to the forefront, and the 2000s spawned the early days of the smartphone revolution. The next technology poised to revolutionize the world is "additive manufacturing," more commonly referred to as "3-D printing." For investors in the know, there's still a tremendous opportunity for growth, because the 3-D printing industry only generated about $3 billion in revenue last year. Many believe that number will grow by orders of magnitude in the future and potentially threaten China's manufacturing stronghold in the process.  

3-D printing 101
On a high level, 3-D printing is a layer-by-layer additive manufacturing process, meaning it can build objects out of a variety of materials "slice by slice" until an object is fully "grown." This differs from traditionally manufactured objects, which often start out as a solid block of material that is then shaved down into its final shape. Between faster lead times, no tooling, and nearly unlimited complexity, the advantages of 3-D printing over traditional manufacturing methods can be profound for manufacturers. Taking everything into account, 3-D printing has the potential to make fundamentally better products than conventional methods, more efficiently.

It's not surprising that a host of companies have begun taking notice of the built-in advantages and efficiencies of 3-D printing. For example, General Electric (NYSE: GE  ) is working to 3-D print upward of 40,000 fuel nozzles a year for its next-generation Leap jet engine from its U.S. advanced manufacturing facilities. According to General Electric, a conventionally manufactured fuel nozzle would have to be made in 20 parts, but a 3-D printed fuel nozzle can be produced as one part. Clearly, the amounts of labor and resources that GE saves from using 3-D printing to consolidate mission-critical components are quite meaningful.

Consequently, General Electric plans to have 50% of its manufactured products "touched" by 3-D printing over the next 20 years, meaning that either the products themselves are 3-D printed, the products were created using 3-D printed tools, or early iterations of the product were 3-D-printed in the development phase to aid product design. It will likely take billions of dollars in new investment for General Electric to grow its 3-D printing and advanced manufacturing capacity to accommodate these ambitious plans. And that's just one manufacturing company! The continuing worldwide adoption of 3-D printing may ultimately promote a resurgence in localized manufacturing that could cut China's manufacturing base out of the equation.  

Tremendous untapped potential
According to Wohlers Associates, a 3-D printing insights firm that has been tracking this sector since the beginning, the 3-D printing industry has an impressive 27% compound annual growth rate over the past 25 years. In the last three years, industry growth has accelerated to 32.3% a year, compounded, suggesting that the technology could be reaching a tipping point as uses for 3-D printing are still being discovered. Going forward, Wohlers believes that "[3-D printing] continues to offer tremendous untapped potential, especially in custom and short-run part production."

Despite this tremendous growth potential, the industry only generated about $3 billion in worldwide revenue last year -- that's peanuts compared to the $10.5 trillion worldwide manufacturing base. By 2021, Wohlers estimates that the 3-D printing industry should be worth $10.8 billion -- still significantly less than 1% of worldwide manufacturing. Ultimately, if 3-D printing can grow to represent just 1% of worldwide manufacturing, we're talking about a $105 billion a year industry. Talk about the early innings for 3-D printing investors!  

Buy these 3-D printing stocks
Believe it or not, 3-D printing is already being employed by the U.S. Air Force, BMW and even Nike. Respected publications like The Economist have compared this disruptive technology to the steam engine and the printing press; Business Insider calls it "the next trillion dollar industry." Watch The Motley Fool's shocking video presentation to learn about 3-D printing being the next great technological innovation, one that will bring an end to "Made In China" for good. Click here!

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  • Report this Comment On June 19, 2014, at 1:07 AM, mjobson wrote:

    3D Printing has been used for years. I am a product designer and I used to work in China also.

    3D printing is a very useful part of the design process now; but the price of materials too high and time it takes to print out a part is too long to realistically compete with traditional high volume manufacturing techniques.

    However, 3D printing has found a niche in manufacturing. Small boutiques and artsy items that artists and designers want to sell as small markets. Previously they'd have to make these small products by hand or invest in low range manufacturing techniques. Now all they have to do is get it 3D printed.

    The main problem with 3D printing is that it's highly technical to create a decent part. You have to be a craftsmen and know what you're doing. It's not like printing on paper. (Even then, the general population hates and can't work their everyday printer properly. 3D printers have so many more variables to get right for the part to come out properly)

    Currently there are 2 major alternative routes to go down that are relatively cost effective.

    Route A : pay for a service to print your part using a service like "Shapeways".

    Route B : buy a cheap machine made for hobbyists (most cost effective long term, but great reduction in quality) like the "Makerbot" series.

    There have been vague promises for the last 6-7 years that these printers would become standard equipment in our homes in the future; but that assumption doesn't take into account the need to know how to use them. There would need to be serious upgrades to the software and integration of hardware (like 3D scanners) before you realistically could download a part (eg. your tv remote control) and print it from home.

    Also, what would be the point of that? Is that such a necessary thing we need in our lives to invest billions into?

    The dream all humans on earth could make anything we could possibly dream of if we had 3D printers in our home really has no merit whatsoever. Everybody has pencils, why can't we all draw like Rembrandt?

    And to round this out. Think about what goes into many manufacturing processes. There are many different parts and materials involved in products. These materials may be produced at separate factories and assembled at another factory. Production lines are just that; productive. They involve staged processes and separation machines, quality testing machines etc.

    The suggestion that 3D printing could take over all those needs is really short sighted. Because the companies who print your 3D parts still have to handle and clean every part that comes out of the machine.

    Compare that to Injection Moulding, where parts can be spit out every few seconds, as opposed to every half hour (and require hand cleaning),,, you can see the costs for 3D printed parts adding up.

    Right now, GM will basically 3D print everything it can in the design phase, but if they are going to make more than a few hundred cars per version this is less cost effective for them.

    Also, you can currently only create smallish parts using 3D printing and this isn't just a limitation of the size of the 3D printers, but also a limitation of the process.

    They can't 3D print a whole bumper using the level of detail and strong plastic that is used in SLS (Selective Laser Sintering) for example. So the finish and detail on a 3D printed bumper is crap and cannot be used as a real part in real life as it would fall apart.

    Basically, what I am saying is that technology wise we are quite a far way off being able to print anything we can dream of with no consequences. Also there are too many competing 3D printing manufacturing techniques and there is no machine that can print out any material we throw at it.

    Also, it's still going to be for a semi-niche market because not everyone can design or operate CAD software (and whilst there is some simplified software out there.. the results aren't great or custom)

    I love 3D printing and the advantages it provides me as a designer; but realistically i'd not want to be investing money to pay for companies to play around and try to figure out how to make this whole thing work for manufacturing or the general populace.

    You might as well burn your money. At least you would be warm.

  • Report this Comment On June 19, 2014, at 10:05 AM, ScottAtlanta wrote:, convinced yourself yet?

    In the future, You can rock yourself to sleep, muttering "It just doesn't make sense..." when you've missed out on the first 100 billion dollar++ 3D printing co.

    Your "logical" and "reasonable" concerns have proven to be inaccurate time after time in various paradigm shifts in technology...first iterations are bulky, slow, expensive and co-exist for periods of time with existing "proven, efficient, technology,"....but eventually the new tech is developed to a point where it replaces the old and allows exponential growth....for a while...then stagnation and a new tech to replace that...think vacuum tubes to silicone chips, autos, cell phones, and on and on...The cycles between old and new tech are quickening, eg. cell phone adoption rates vs. smartphone adoption rates.

    We're at an age where anything that can be coded in digital format experiences exponential growth....increasingly everything is becoming digitized, scanned, coded, measured for manipulation and analysis.

    See Ray Kurzweil's Singularity is Near....even it you dismiss his predictions....the data can't be dismissed.

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Steve Heller

Covering 3-D printing at the intersection of business, investing, and what it means for the future of manufacturing. Follow me on Twitter to keep up with the ever-changing 3-D printing landscape by clicking the button below.

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