Swedish industrial metals 3-D printer maker Arcam (NASDAQOTH:AMAVF) announced Monday that it had launched Inconel 718 as a qualified material for use in its proprietary electron beam melting, or EBM, systems. Here's what investors should know.
Arcam's press release said the Inconel process is "initially" available for its A2X platform. So I'd imagine the company plans to roll out Inconel 718 to some of its other platforms as well. Arcam's A2X is a 3-D printer that is highly suited for processing high temperature materials and is used for aerospace applications.
Inconel, which is a trademark belonging to Precision Castparts (NYSE:PCP), is a family of superalloys based on nickel-chromium. Titanium and Inconel are the "big two" of aerospace metals, though Inconel has other applications. Inconel alloys retain their strength over a wide temperature range and are also oxidation- and corrosion-resistant, which makes them a good fit for extreme environments.
The qualification testing was performed in collaboration with the U.S. Department of Energy's Oak Ridge National Laboratory in Tennessee. Arcam has long partnered with ORNL, which is a world leader in advanced materials research and development.
"With the introduction of the Inconel 718 our customers in the aerospace industry can now further expand the range of components that they produce in their EBM machines," Arcam CEO Magnus Rene said in the press release.
The aerospace industry is fired up about 3-D printing
The aerospace industry was one of the early adopters of 3-D printing, and is increasingly embracing this disruptive technology for an ever-widening array of applications. It's a huge and diverse market, which includes commercial and military aircraft, space applications, and missiles, along with engines and other various subsystems.
Size and diversity aren't the only factors that make the aerospace industry especially attractive to 3-D printing companies. There is also the high barrier to entry, the result of the critical end-use applications. This is in stark contrast to the low-hanging fruit that is the consumer market, which continues to see new entrants pour in. The bar is higher to enter the commercial space, but still not nearly as high as the industrial market. Typically, the higher the barrier to entry in any given space, the more pricing power companies operating in that space possess. This is largely why investors should focus on the 3-D printing companies that are winning in the more profitable, non-consumer markets.
SpaceX provides a perfect recent example of the huge inroads that 3-D printing is making in the aerospace industry. The space transportation company founded by Elon Musk said in late May it had completed qualification testing for the SuperDraco, an engine that will power the Dragon V2 spacecraft's launch escape system. In a revolutionary first, the SuperDraco's Inconel engine chamber was produced using 3-D printing.
"Through 3D printing, robust and high-performing engine parts can be created at a fraction of the cost and time of traditional manufacturing methods," Musk, SpaceX chief designer and CEO, said in a press release.
SpaceX used a 3-D printer made by privately held EOS to produce the chamber. The Germany-based company's proprietary direct metal laser sintering technology is widely considered to be top-notch. 3D Systems' printers also feature laser sintering, which is the most commonly used technology for 3-D printing in metals, while ExOne's systems use its binder jetting technology. 3D Systems has had Inconel-printing capabilities since acquiring metal-printing specialist Phenix Systems last summer, while ExOne is slated to roll out Inconel alloy 625 this month.
Foolish final thoughts
Arcam is a key 3-D printing player in the aerospace market. The addition of an Inconel superalloy to its aerospace materials' arsenal -- which already includes titanium alloys -- should help the company further penetrate this lucrative niche.
Additionally, Inconel is reportedly a difficult metal to machine using traditional subtractive manufacturing techniques. This, to me, implies that we could see a greater increase in the use of 3-D printing to produce components made of Inconel than is likely for components comprised of other metals.
Beth McKenna has no position in any stocks mentioned. The Motley Fool recommends Precision Castparts. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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