Please ensure Javascript is enabled for purposes of website accessibility

3-D Printed Finished Goods Are No Joke

By Steve Heller - Nov 22, 2013 at 10:15AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There’s more money to be made in manufacturing than prototyping.

Additive manufacturing authority Wohlers Associates has come out with a note saying how it expects the 3-D printed finished goods market to "far surpass" the 3-D printed prototyping market. Driven by continued advancements in 3-D printing technology, investors can look forward to 3-D printing playing a bigger role in finished goods manufacturing.

A growing trend
From 2003 to 2012, the 3-D printed finished goods market grew from 3.9% of all 3-D printing revenues to 28.3% of revenues last year. Currently, General Electric (GE -0.16%) is positioning itself to become a huge benefactor from 3-D printing with its plan to "print" 85,000 fuel nozzles for its upcoming Leap engine that will be used in commercial aircraft.

By utilizing a 3-D printing technology called selective laser sintering, or SLS, GE will be able to "print" the fuel nozzle as one finished part, capable of withstanding 2,400 degrees Fahrenheit. The same nozzle made with conventional manufacturing methods would have to be made in 20 parts and would tie up additional resources during the assembly process. Ultimately, GE hopes to put out 45,000 fuel nozzles a year from its 3-D printing operations, but it isn't expected to reach this goal for a number of years.

Due to capacity constraints, GE would have to purchase 60-70 current-generation printers, which can cost upwards of $1 million per device, in order to achieve its target output. Instead, GE has pledged to invest "tens of millions" of dollars toward building out the technology supply chain so that next-generation 3-D printers can handle three to four times the capacity. In other words, the next-generation of industrial 3-D printers will likely be better suited and more cost effective to handle the scale of an industrial giant like GE.

3-D winners
Because GE already owns a total of 35 3-D printers made by EOS and Arcam, it's likely for GE to continue investing with these partners to build higher capacity machines. In addition, 3D Systems (DDD -0.67%) may have the potential to play a bigger part in GE's 3-D printing scale-up plans. The company's purchase of metal-printing specialist Phenix Systems gives it more credibility on the subject, not to mention, 3D Systems' CEO feels pretty confident that its 3-D printers are up for the job. If you're a 3D Systems investor, you should find it encouraging that GE is testing out some of 3D Systems' printers for this role.

Potential losers
(SSYS -2.39%) could have the most to lose because its 3-D printers are primarily meant for prototyping and currently do not support printing with metals. It's expected that Stratasys will eventually release 3-D metal printer, but until it does, Stratasys remains focused on a market that is ultimately likely to represent a much smaller percentage of the entire 3-D printing pie.

Additionally, neither voxeljet's (VJET 5.14%) nor ExOne's (XONE) 3-D printing technology is well-suited for GE's current fuel nozzle needs because neither employ the use of SLS technology. Instead, both companies use a bonding agent to adhere layers of material together, as opposed to a laser that fuses layers together. Investors shouldn't take this to mean that voxeljet or ExOne won't be playing a big role in the future of finished parts 3-D printing. The reason is that both are heavily reliant on printing with sand on an industrial scale, which is an extremely important material that can revolutionize the traditional tooling and sand casting process.

The real winner
Because the ratio of prototypes to finished products is often upwards of 1:1,000, it's likely only a matter of time before more money flows toward the finished goods side of the 3-D printing industry. The major driver behind this shift will come from industrial manufacturers like GE demanding that 3-D printing technology continue to advance in ways that suits their operational scale.

At the end of the day, GE is the true winner because its operations have the most to gain from implementing 3-D printing technology. If all goes well with printing these fuel injectors, the implications are enormous. Should GE then decide to implement 3-D printing across as much of its manufacturing footprint as possible, we're talking about potentially billions of dollars in savings.

You'll likely be served well by sticking with 3-D printing companies that cater to the needs of finished goods manufacturers. You could also zero in on companies like GE that stand to save billions in expenses over the long term by implementing 3-D printing.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

General Electric Company Stock Quote
General Electric Company
$66.97 (-0.16%) $0.10
3D Systems Corporation Stock Quote
3D Systems Corporation
$10.45 (-0.67%) $0.07
Stratasys Ltd. Stock Quote
Stratasys Ltd.
$19.21 (-2.39%) $0.47
The ExOne Company Stock Quote
The ExOne Company
voxeljet AG Stock Quote
voxeljet AG
$3.62 (5.14%) $0.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.