If you’ve been wondering if 3D printing will live up to its advertising and is worthy of a place in your portfolio, you will be interested to know the emerging sector just got a couple votes of confidence.
One vote of confidence comes from the U.S. Department of Defense, the other from ARK Investment Management, whose thematic and actively managed ETFs have been the talk of the investment world, some of which racked up 100-plus-percent returns this past year.
Let’s start with the Defense Department, which has inked a $1.6 million contract with The ExOne Co. to develop a self-contained 3D-printing “factory” that operates from a shipping container. The idea is to create durable and portable 3D-printing units that can be deployed to wartime theaters of operation to crank out any number of military parts and components necessary to keep U.S. armed forces operational and deadly.
The 3D-printing pods will be housed in regular shipping containers up to 40 feet long, making them easy and quick to deploy. To fulfill the contract, ExOne is developing a “military edition” of its binder jet 3D-printing technology, according to Interesting Engineering, an information site that reports on tech innovations.
ExOne’s upcoming military version will use more than 20 metal, ceramic or composite materials to produce parts in its onsite 3D-printing facilities, which will give the military the ability to conduct maintenance and replace faulty or damaged parts more quickly and at lower cost than have them manufactured and shipped from the U.S. mainland — reducing production and implementation time from weeks to just hours.
The Defense Department contract with ExOne is not a first, writes Interesting Engineering. The U.S. Marines have their own 3D-printing container, the X-FAB, and the Dutch Navy recently unveiled its 3D-printing collapsible shipping container to print spare parts.
ARK Investment Management recently produced a report asserting that 3D printing will revolutionize manufacturing by collapsing the time between design and production, reducing costs and providing greater design complexity, accuracy and customization. The report forecasts an annual growth rate of roughly 60 percent, taking the sector from a $12 billion industry in 2020 to $120 billion in 2025. It lists the “addressable opportunities” for 3D printing to include:
- Aerospace
- Autos and auto parts and equipment
- Machinery
- Healthcare equipment and supplies
- Plastic products
- Footwear
- Foundries and metal products
- Die sets, jigs and industrial molds
- Semiconductors and semiconductor equipment
- Hobbies, toys and games
There are vastly more opportunities beyond that. WinSun, a company in China, used giant 3D printers to make 10 full-sized, detached single-story houses in a single day, as reported by the Xinhua news agency.
Over time, 3D printing technology is expected to create a cottage manufacturing industry in the United States and other countries, allowing small-scale decentralized manufacturing businesses, often operated out of a home rather than a purpose-built facility.
ARK believes 3D printing is misunderstood today, leading to historically poor market performance and stock declines for companies in this industry. But the investment manager expects 3D printing to revolutionize manufacturing. ARK estimates that 3D printing is one of the highest growth potential industries in the economy and is set to transform the manufacturing landscape.
The firm's 3D Printing ETF returned just over 39 percent to shareholders during the past year. The fund contains 49 companies and counts among its largest holdings: 3D Systems Corp.; HP; Trimble, Inc.; MGI Digital Graphic Technology; and Altair Engineering.
3D printing is a form of additive manufacturing that builds objects layer-by-layer, as opposed to traditional subtractive manufacturing that removes material from larger blocks, the ARK Invest report explains. 3D printing collapses the time between design and production, shifts power to designers, and reduces supply chain complexity, at a fraction of the cost of traditional manufacturing.
ARK Invest CEO Cathie Wood points to automobile manufacturers as a business likely to go big on 3D printing as automakers run into demand issues. She was quoted by CNBC this past year, observing: “They are going to be turning to new technologies that are going to help them lower their costs, lower the fuel consumption in terms of weight and, ultimately, create different form factors. We think that entire autos, ultimately, will be 3D printed.”
Mike Consol (m.consol@irei.com) is editor of Real Assets Adviser. Follow him on Twitter @mikeconsol to read his latest postings.