A Rebuttal to an Additive-Manufacturing Skeptic

By Chris Wood, Senior Analyst

While surfing the Technology Review magazine website last week, I came across an article written by Christopher Mims titled Why 3-D Printing Will Go the Way of Virtual Reality. The gist of the article is that 3D printing is cool, but it's not the revolution in manufacturing that many (we included) have claimed it to be. [Ed. note: In case you missed it previously, our introductory article on 3D printing from several months ago titled A Manufacturing Revolution is a good overview of the technology.]

According to Mims:

3D printing, like VR [virtual reality] before it, is one of those technologies that suggest a trend of long and steep adoption driven by rapid advances on the systems we have now. … But the notion that 3D printing will on any reasonable time scale become a "mature" technology that can reproduce all the goods on which we rely is to engage in a complete denial of the complexities of modern manufacturing, and, more to the point, the challenges of working with matter.

While Mims' article makes some valid points, his analogy comparing 3D printing to virtual reality [epitomized by the movie Lawnmower Man] is misplaced; and he seems unclear on what it is that 3D-printing bulls actually expect from the technology. What's more, he fails to mention recent advancements that have vastly expanded the markets 3D printing can serve.

As we've noted before, 3D printing is already a $1 billion+ business according to the most recent Wohlers Report. 3D-printing companies like 3D Systems (NYSE.DDD) and Stratasys (NASDAQ.SSYS) are both pulling in north of $140 million a year in revenue, and growing fast. I don't recall any virtual reality companies generating anywhere near that level of sales. VictorMaxx Technologies – maker of the CyberMaxx Virtual Reality Headset – discontinued operations only 18 months after going public at the end of 1996, with revenues of $750,000 and a net loss of $3 million.

Furthermore, advocates of 3D printing are not suggesting that these technologies will ever "reproduce all the goods on which we rely." We are saying that this thing is going to be huge; it already is.

For those not familiar with the subject, 3D printers take a three-dimensional CAD (computer-aided design) and create a physical product from the specs layer by layer, usually by extruding thermoplastic modeling material or sintering metal powders or liquid photopolymers via lasers or electron beams.

This technology will not go the way of virtual reality for many reasons, including:

• The numerous benefits 3D printing has over traditional manufacturing processes;
• The breadth of market penetration the tech has already accomplished with current applications;
• The technological advancements that have expanded its market opportunity; and
• The increased ease of use and burgeoning consumer market.

Benefits of 3D Printing

The various technologies involved in 3D printing are already changing the world through their myriad benefits over traditional manufacturing processes.

Some of these benefits include:

• Rapid Deployment – Time to market is reduced. Since 3D printing eliminates the need for tooling, manufacturing can begin immediately after a component's design is complete. What used to take days, weeks, or months can now be measured in minutes and hours.
• Low Capital Expenditure – Eliminating tooling also reduces the cost of manufacturing. Traditional dies and tools are expensive. By cutting out those expenses, 3D printing allows for a much lower initial cash outlay to ramp up manufacturing.
• Less Waste – While traditional "subtractive" manufacturing processes can often remove up to 90% of the raw material to arrive at a finished component, 3D printers only use the material they need to make the part.
• Freedom of Design – Traditional manufacturing methods are bound by rules – such as design for manufacturability (DFM) and design for assembly (DFA) – that govern the complexity and ultimately the performance of products. Since 3D printing constructs parts with an additive fabrication process, complex designs are just as fast to manufacture as simple ones. In fact, 3D printers can actually create structures that are more intricate than any other manufacturing technique and that are impossible to build any other way. You can create parts with moving components, hinges, and parts within parts. Changes cost almost nothing to make. Thus, 3D printing promotes product innovation and allows design to be highly optimized for performance.

Current Applications

Aerospace to academia and everything in between can have an application in 3D printing. It doesn't make sense to say 3D printing will never become a "mature" technology, considering the breadth of industries it has already penetrated. 3D printing technology is used frequently in the fields of aerospace, architecture, automotive, dental and medical, education, engineering and construction, footwear, jewelry, industrial design, and the list goes on. And while rapid modeling and prototyping still makes the biggest business case for 3D printing, the machines are increasingly being used to make final products too. According to Wohlers Associates, more than 20% of the output of 3D printers is now final products rather than prototypes. The firm predicts that this figure will rise to 50% by 2020.

In the meantime, in addition to the more traditional applications – like motorcycle maker Ducati, which was able to cut 20 months and more than 70% from the development time of a new racing engine thanks to prototyping with a 3D printer – we have MIT 3D printing solar cells on paper, designer Enrico Dini 3D printing whole buildings, and scientists 3D printing human veins... not to mention the first 3D-printed car that recently rolled off the press.

Advancements

When 3D printers first hit the scene in the early 1980s, they were rather crude by today's standards. Recent advancements in what they can do and the materials they can do it with have guaranteed the technology's use in a growing number of markets in the years to come.

Today, we have 3D printers that can build structures nearly three meters high. On the other end of the spectrum there are machines that can 3D print microstructures with intricate designs as small as just a few micrometers in diameter. Using a technique called two-photon polymerization (2PP), Klaus Stadlmann was able to 3D print an object at 20 micrometers – approximately the size of a dust particle.

Improvements in the 3D printing processes themselves are important. But it's the new materials available that have made it possible to produce low volumes of high quality, complex models, parts, and complete end-use products. These are products that meet the rigorous requirements of the industries they serve – from skateboards and shoes all the way to spinal implants created out of medical-grade titanium, and engine parts.

Private company Objet, for example, offers 3D printing solutions with a choice of over 60 materials capable of simulating properties including varying grades of rubber, clear transparency, and rigid, ABS-grade engineering plastics.

Here's a picture of a stool the company created in a single print job that is capable of supporting more than 220 pounds:

Meanwhile, a company called Shapeways offers 3D-printed objects in materials such as acrylic plastic, stainless steel, sterling silver, ceramics, glass, and full color sandstone – all with a variety of finishes available.

EOS is able to 3D print top-quality metal parts like a patient-specific knee implant (left) using a biocompatible cobalt-chrome alloy, and a fuel-injection nozzle (right) for gas turbine applications using cobalt chrome.

3D Systems has printers that use commercially available, gas-atomized metallic powders to produce fully dense metal parts in materials including titanium, stainless steel, cobalt chrome, and tool steel.

Ease of Use

In addition to becoming more advanced, 3D printers are also becoming smaller, cheaper, and much easier to use, which should help the consumer market grow beyond just the most hardcore hobbyists.

Early 3D printers were highly complex, rather large, and very expensive, targeting only the largest manufacturers that could afford their several-hundred-thousand-dollar price tags. That's not the case anymore. While very high-end printers can still cost as much as $1 million, the options available to consumers are growing by leaps and bounds.

At the recent Consumer Electronics Show in Las Vegas, we were introduced to two new 3D printers that should help bring 3D printing to the masses.

3D Systems introduced its $1,299 Cube 3D printer. The name of the game with this machine and the supporting Cubify website is (according to the company), "coloring book simplicity." The Cube requires no assembly and is ready to print out of the box. All you have to do once you get one is visit the website, download the digital file of your choice, and start printing.

MakerBot Industries also debuted a personal 3D printer at CES. Called the Replicator, this machine is capable of printing in two colors, but it costs several hundred dollars more than the Cube and requires some assembly after purchase. MakerBot's printer, however, is all open source; and the company has a site called Thingiverse, where it shares all the digital file designs (and the designs for the printer itself) for free. So you can just download whatever you like, and you can modify it and make it yours if you like.

And if you're the type who likes to create your own designs rather than just downloading the work of others, there's free software like Google SketchUp, which allows you to create products from scratch relatively easily.

Will this increased ease of use ever lead us to the utopian future where we can all instantly download and manufacture anything, anytime, anywhere? Who knows? But we do know that as the technology progresses and costs go down, 3D printers will become more attractive to consumers.

Challenges

We're not suggesting that 3D printing will soon – or ever – replace all traditional manufacturing processes. There are many challenges that still lie ahead. Despite all the benefits of the technology, several factors capable of curbing its adoption and hindering its growth must be acknowledged.

For starters, 3D printing is not presently a high-volume manufacturing process. 3D printers would be advantageous for production quantities ranging from one to at most several thousand units per year, and where quick modification and customization capability is desirable. But if the demand is for millions of identical units a year, 3D printing is not yet the right solution.

What's more, you're probably giving up some output quality when you choose 3D printing over traditional manufacturing. Despite ongoing technological improvements in this area, 3D printing cannot yet fully compete with injection molding. 3D printers are capable of holding accuracies that are approximately +/- 0.005-inch for small to mid-sized parts, whereas injection molding is capable of holding +/- 0.001 to 0.002-inch tolerances across all features of a part.

Lastly, despite the expanding number of materials that can be utilized by 3D printing technologies, the options are still much more limited than for a process like injection molding.

But none of these factors is capable of sending 3D printing the way of virtual reality, in our view.

Conclusion

The point is, 3D printing is simply too useful across a wide spectrum of applications to be compared to VR. It is here to stay. Going forward, the technology will displace conventional manufacturing techniques in some instances and complement them in others. Consumers will increasingly adopt it. The technology will continually be refined, while the range of usable materials will broaden. These advancements should allow us to start printing electronics in a few years… and perhaps even body parts someday down the road.

This is an industry barely into its infancy. It's a situation not unlike that with the personal computer thirty years ago, when only Steve Jobs, Bill Gates, and a few other visionaries foresaw that the PC could become an essential household appliance.

Will it be the same for the 3D printer? Don't bet against it.

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Facebook Finally Files Paperwork to Go Public

As was expected, Facebook filed a Form S-1 yesterday, announcing its intention to offer shares of Class A common stock to the public under the symbol "FB." The filing indicates that Facebook is seeking to raise $5 billion when it IPOs in the spring, but that number will likely increase. Also contained in the document were the detailed financial results that we've all been guessing at these past few years. What the numbers show us is that Facebook is a very profitable, rapidly growing business (well, duh!?!) but it might not be growing as fast as some people thought.

Revenue in 2011 rang in at $3.71 billion, up 88% from the $1.97 billion the year before. Impressive. But the annual growth rate did slow from the 154% experienced in 2010. When you're dealing with such large revenue figures you expect growth rates to decline over time (unless you're Apple over the past several years), but you might not expect such a big reduction from a relatively young enterprise. Meanwhile, net income of $1 billion in 2011 reflects a 65% increase from the year before, but the net margin of 26.9% was down 375 basis points from 2010.

With strong, growing revenues, significant profits, and 845 million monthly active users, it's no secret that Facebook is a force to be reckoned with. When the company does go public at maybe a $75 billion valuation, it will make a lot of people very rich. Good for them; we're happy to see the market reward individuals both for their innovations and for helping fund such endeavors.

What we're not sure of is how much love the market will give to FB in the days and weeks after the IPO, particularly after the lockup period is over. If Facebook is able to grow revenue at its current rate of 88% for, say, the next three years and can maintain its net margin of 27% (which would result in earnings of about $3.5 billion and a P/E ratio of 21 – not too much above Google's earnings multiple of 17), then a $75 billion valuation does not look too rich. But if there's any hiccup in revenue growth, watch out.

Bits & Bytes

Graphene Competitor Used to Make Circuits (Technology Review)

Graphene – the one-atom-thick, honeycomb-lattice allotrope of carbon – is a material with virtually limitless potential (which helps explain why its discoverers received the 2010 Nobel Prize in physics). It's the best conductor of electricity at room temperature that we know of, and it's also the strongest material ever tested. Because of its unique properties, scientists have believed for years that graphene might be capable of solving silicon's shortcomings in electronics. Prototype transistors composed of graphene operate at much higher speeds than silicon ones. But a material called molybdenite has a crucial advantage over graphene that might make it the answer for smaller and faster electronics.

UPenn Unleashes Swarm of Nano Quadrotors (gizmag)

Scientists at the University of Pennsylvania's General Robotics, Automation, Sensing and Perception (GRASP) Lab demonstrate in a video scene how science fiction is edging closer to reality as programmed teams of up to twenty agile-flight-capable quadrotors fly in various complex formations. This stuff is cool, but kind of creepy also. We're probably not much more than a decade from seeing these things flying around Times Square sniffing for explosives.