Additive Manufacturing – The future of manufacturing

Additive manufacturing has always been a niche market dominated by a few companies. That said, the 3D printing industry is growing rapidly and is expected to reach a market value of more than USD 40 billion by 2025. This could result in interesting investment opportunities.

From an existence in the shadows to savior

In recent years, 3D printing has received a lot of attention. Celebrated as a technology that would spark a third industrial revolution, the history of 3D printing actually goes back to the early 1980s. Nevertheless, it remained in the shadows until the expiration of a crucial patent in 2009, which then enabled many start-ups to enter the market. In the meantime, this manufacturing method has found its way into many areas and industries. An increasing number of companies are relying on this forwardlooking technology for the production of sophisticated components. Although the Corona pandemic did not spare this industry either, the market for 3D printing processes recently grew to a size of USD 12 billion. However, this is just the beginning, as additive manufacturing has a growing application in mass series production. The complex technology of additive manufacturing contains immense growth potential that will significantly change the industrial supply chain and shape the future of manufacturing. Design flexibility, sustainability, rapid product development and associated cost advantages are just some of the key drivers.

How additive manufacturing works

Additive manufacturing refers to a process in which component are built layer-by-layer based on digital 3D design data. For this purpose, a thin layer of powder material is applied on to a building platform. A powerful laser jet melts the powder at the exact points specified by the computer-generated design data. The building platform is then lowered and another powder application is made. The material is melted again and it bonds with the underlying layer at the defined points. Different materials such as metals, plastics and composites are available as material powders.

Increasingly, the term "3D printing" is used as a synonym for additive manufacturing. Additive manufacturing as a term better describes this professional production process, which is very different from conventional manufacturing methods such as injection molding, die casting or milling.

How 3D printing is shaping the future of manufacturing

Additive manufacturing initially had its roots in how we showcase the illustrative and functional prototypes of certain products. In the meantime, it is increasingly finding its way into mass series production, as it addresses areas where conventional processes face various limitations. Conventional manufacturing and production processes are in dire need of overhaul and redesign. This is compounded by increasing cost pressures, regulatory requirements and growing demands from consumers for quality and quantity. In addition, topics such as energy and resource efficiency are increasingly coming to the fore. As a result, traditional manufacturing structures and processes are struggling. They were designed for efficiency only at particular levels of capacity utilization. They have little flexibility on cost and supply chain management. This is uneconomical particularly where high value commodities are tied up in the production chain. The pandemic and its effects have emphasized the urgency towards adopting flexible manufacturing processes. Another challenge is the trend towards increased consumer personalization of products. In the automotive industry, for example, an increasing number of base modules are subject to a high variation of individually designed components, which need to be finished with bespoke customer specifications. In this respect, new production technologies are critical for meeting bespoke customer needs in a cost efficient manner.

«The Sky is the limit»: a practical example

Can we also extend 3D printing to produce functional components with extremely complex geometry and highly defined aerodynamic properties in a cost sensitive manner within a short span of time? The answer is yes. The aircraft engine and turbine, as well as components for aircraft cabin interiors are typical examples of highly specialized 3D printing at an industrial scale. It is not only varying product configurations combined with flexible economies of scale and immense cost savings that speak in favor of additive manufacturing. Material and weight savings also reduce both fuel consumption and CO2 emissions. Therefore, leading aerospace companies have already integrated additive manufacturing technology into the planning of their future production strategies. The Ariane Group, a subsidiary of the aerospace group Airbus, which among other things manufactures carrier missiles for satellites, provides an appropriate example.

Inside a rocket engine, enormous energy forces prevail under extreme internal and external conditions. This calls for maxi-mum reliability and precision in a small package. The injection head is one of the central elements of the engine. When manufactured using conventional methods and tech-nologies, it consists of 248 components that need to be produced and assembled in various steps along the process. Additive manufacturing simplifies the construction of the engine module from 248 parts to a single component, reduc-ing production time from 3 months to 35 hours and cutting costs by 50%.

Today, additive manufacturing processes have established themselves in almost all sectors of industry, serving not only technically challenging areas such as healthcare, aviation and the automotive industry, but also mass markets such as the lifestyle and consumer goods sector.

«The best time is now»: Bright perspective for the future of the 3D printing

According to the Wohlers Report, AM Power Report 2020, the market value for additive printing processes reached a size of c.12 billion USD in 2019. This volume implies growth rates of around 25% in the past 5 years. This is despite the fact that major global corporations such as BMW and Adidas only recently discovered the potential of additive manufacturing. In was not until 2018 that they began to gradually incorporate 3D printing techniques into their production process. A comparison to the expansion of the internet seems appro-priate. While the precursors of the Internet already existed in 1985, the conquest of the Word Wide Web did not take place until the mid-1990s - and today it is impossible to imagine everyday life without it. According to various sources, the market volume is expected to reach USD 35-42 billion by 2025 thanks to the increasing spread of additive manufacturing in industry and research.

While many companies initially remained skeptical about the new technology, the supply shortages in conventional manu-facturing caused by the corona pandemic are likely to force a reevaluation. The greater flexibility in production planning offered by additive manufacturing, as well as the reduction in storage costs thanks to "on-demand" production, should also help attract new customers to the 3D market.

How investors could profit from the technology of the future

For investors who are convinced of the prospects of additive manufacturing and want to invest in this exciting future market, it is worth examining the composition of the 3D market. The key players can be primarily divided into three categories: 1) The manufacturers of the software required to cre-ate 3D models and designs. 2) The suppliers of raw materials, which are used in the 3D manufacturing process. 3) Finally, the leading producers of 3D printers.

In order to unlock the full potential of the 3D market for interested investors, the Vontobel "Additive Manufacturing" Tracker Certificate consists of the most promising companies in all three categories. In addition to specialists such as Desktop Metal and Exone, which focus exclusively on the production of 3D printer manufacturing, it also includes companies such as General Electric and Linde. While additive manufacturing is by no means a main source of revenue for these companies, they are among the largest players in the 3D market and are driving research and development of 3D printing processes backed by their significant investment.

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