3D Systems expands portfolio and eyes future growth

16 Oct 2013

Recent acquisition of Phenix Systems enhances company's capabilities in metal 3D printing.

When 3D Systems unveiled its financial results for the second quarter of 2013, the headline figure was a rise in revenues of 45 percent, including a healthy 30 percent of organic growth for the South Carolina-based developer of additive manufacturing systems and technology.

The results came shortly before it acquired Phenix Systems, a French developer of direct metal selective laser sintering systems, a deal described at the time as being a strategic addition to 3D Systems' portfolio.

In the weeks since then the company has made further moves, including a partnership with UK trade-only technology distributor Midwich, said to signal an aggressive pursuit of the education market; and the purchase of CRDM, a provider of rapid prototyping and rapid tooling services also based in the UK.

This level of activity from a company said to be one of the fastest growing technology firms in the US confirms the current heat around 3D printing, a technology set to impact a range of manufacturing scenarios.

"The acquisition of Phenix brings superior metal 3D printing technology into the portfolio," commented Kevin McAlea of 3D Systems, speaking to Optics.org. "Phenix direct metal printers create chemically pure, fully dense metal and ceramic parts from very fine powders with the granularity of 6 to 9 microns. Materials include stainless steel, tool steel, super alloys, non-ferrous alloys, precious metals and alumina for a variety of aerospace, automotive and patient-specific medical device applications."

According to data from Phenix, its systems are capable of first-time build tolerances of between 50 to 100 microns, with as-printed surface finishes of 5 microns Ra.

"The combination of accuracy and resolution means we can focus not only on markets where metal printing would be a benefit, but also on those involving very intricate, tiny parts as well," said McAlea. "This technology is an obvious winner in dental applications, such as creating perfect custom metal braces, as well as the creation of jewelry or fine-pitched gearing. There are many instances in which creating short-run metal parts would be prohibitively expensive, and in these instances direct metal printing is a game-changer."

Content-to-print platforms
As 3D printing becomes further established in the public consciousness, and with additive manufacturing machinery now available via retail, developers are pursuing a variety of different market sectors. In 3D Systems' case this has involved the development of content-to-print platforms, controlling the additive manufacturing process at each stage from the creation of suitable three-dimensional data to the printing of the final component.

"We believe that both consumer and industrial applications are important, and have been building content-to-print platforms for the established corporation, individual entrepreneur and consumer alike," said McAlea.

"In addition, 3D Systems features cloud-printing services such as Quickparts, which gives anyone access to all our materials and technologies without purchasing a 3D printer. The aim is to democratize access through affordability and ease of use, and have made it possible for both professional/production clients and the at-home consumer to access a comprehensive range of 3D services and tools."

McAlea singled out the medical sector as being one area where the technology could soon have a dramatic impact. "We put significant resources into patient-specific medical solutions that are powered by 3D printing, a market that we believe is at the tip of discovery and will change lives in ways we cannot imagine today. Our early applications include patient-specific implants; surgery kits; surgical guides for complex, life-saving surgeries; and bespoke prosthetics and braces."

Recurring revenues
The economics of additive manufacture have been much discussed, along with the best way to balance the inherent cost-savings possible in short-run production and the potentially larger cost burdens when applied to high-volume manufacture.

3D Systems believes that the economics are clear from a user's perspective. "3D printing at an industrial level currently offers huge fiscal advantages to manufacturers who have legacy products; a need for one-off or short-run parts; highly complex parts; or mass customization applications," commented McAlea, giving the example of an aerospace company needing to maintain spare parts for aircraft now years old.

"Manufacturing new parts using traditional techniques requires tooling, time and a lot of money, while 3D printing can make them available almost immediately without tooling, setup or inventory carrying costs," he said.

Initial investment and print materials costs will factor into the per-part cost of a 3D-printed item, along with savings from reduced part counts, labor and assembly time, shorter time to market and faster design iteration cycles.

From a vendor's point of view, recurring revenues will then accrue from print materials and services, which are likely to contribute the most attractive gross profit margins. McAlea commented that this was indeed the case for 3D Systems, although also noted that in recent periods profit contributions from the printer systems themselves have been growing at an accelerating rate.

"In the near term, we expect printers to continue to be a high-growth area and grow the installed base for future benefit," he said. "We believe that over time this will lead to recurring revenue making up a larger portion of our total revenue."

The pace of development in additive manufacturing should also play a part; McAlea believes that Moore's law will continue to apply, and the convergence of enabling technologies will benefit 3D printing through increasing speeds and capabilities and reduced price points, though not at the expense of vendors' margins and profitability.

"Although the change is more visible in consumer 3D printing, the cost of the technology is actually decreasing at all levels while quality is increasing, and newer and more diverse materials are being developed," he commented. "Rapid and innovative advances are being made, and we don’t see that stopping."

About the Author

Tim Hayes is a contributing editor at Optics.org.