The Fall and Rise of 3D Printing: How the Pandemic Has Impacted the Industry
16 September 2020
In the new reality, created out of complexity and opportunities, industrial 3D printing continues to evolve to help companies stay resilient and agile.
However, the outbreak of the pandemic brought a lot of uncertainty into the 3D printing industry itself, as some companies experienced a decline, while others managed to stay afloat.
To discover how the pandemic has impacted the industry, we take a look at the state of 3D printing today and explore what lies ahead for the technology as the world recovers.
On the brink of going mainstream
The 3D printing industry has been on a stable growth trajectory over the last decade. In 2019, the global additive manufacturing market grew to over $10.4 billion, crossing the pivotal double-digit billion threshold for the first time in its nearly 40 year history.
Mostly, this growth has been associated with the changing perception of 3D printing, which entered 2020 as a maturing manufacturing solution.
Investment in industrial 3D printing has been booming, with hundreds of millions of dollars poured into the industry. At the same time, more companies have started to explore promising applications, ranging from footwear to implants and rocket engine parts.
In all respects, 2020 promised to be a bright year for the industry, on the cusp of going mainstream.
Until the pandemic hit.
During the first half of the year, 3D printing companies were shaken by the drop in hardware demand. The global uncertainty has caused many companies, looking to adopt 3D printing, to delay purchases and deployment.
Technology market research firm, CONTEXT, estimates that the shipments of hardware in the industrial (≥ $100K) and design ($20K-$100K) segments dropped more than 30 per cent in the first quarter of 2020.
In the meantime, Q1 also marked the metal AM hardware market plummeting about 33 per cent year over year compared to 2019.
One reason for this decline could lie in the aerospace industry – historically, the largest adopter of AM – which was hit hard by the pandemic. Airline companies around the world have made unprecedented cuts to capacity, idled their fleets and started to defer, or stop, new aircraft deliveries.
Understandably, decisions to purchase new technology like AM have been put on hold, although some argue that the promised benefits of AM (part consolidation, reduced lead times, lightweighting) may accelerate investments in the technology.
Pratt & Whitney, for example, states that smart technologies, including AM, have helped the company adapt and service demand, with a significantly smaller industrial footprint, during the pandemic-led downturn.
Along the lines of declined shipments, major 3D printing companies saw revenue declines and announced cuts to stay afloat.
HP’s Commercial Hardware division, which includes 3D printer sales, fell by 37 per cent. Similarly, 3D Systems has announced lay-offs after releasing its Q2 2020 financial results, with reported revenue down by 28 per cent. A similar fate befell another 3D printing giant, Stratasys, as the company’s revenue declined by nearly 30 per cent in Q2 2020.
While the news paints a rather grim picture, the industry is mustering its forces to speed up recovery and come out of the crisis stronger and more consolidated.
While some AM companies faced decline, others managed to thrive, or at least maintain stability, during the crisis. One example is the German metal 3D printer manufacturer, SLM Solutions, which reported a 90 per cent increase in revenue over the first half of 2020. One factor driving this growth can be a backlog of previous orders that were fulfilled during the first half of the year.
Earlier this year SLM Solutions announced they had signed a deal with BEAMIT, an Italian service bureau, for the purchase and delivery of no fewer than 15 machines over the next three years. With the average price of metal 3D printers being hundreds of thousands of dollars, this deal could be significantly contributing to SLM Solutions’ increase in revenues.
Another example is the professional 3D printer brand, Ultimaker, announcing double-digit growth, year-over-year globally, in the first six months of the year.
The company attributes this growth to the increased adoption of professional 3D printers as a stopgap to supply chain disruption.
As hospitals and businesses around the world have been struggling with shortages of medical supplies, 3D printing has stepped in as a valuable resource for the emergency production of parts in need. It proved that it could give companies the agility they lacked with traditional supply chains, enabling them to quickly pivot to on-demand production.
Equally encouraging is to see 3D printing companies continuing to attract capital, even as the pandemic rattles worldwide markets. Since the beginning of the year, several companies have announced successful investment rounds, including VELO3D, Arevo, nTopology and Additive Industries, to name a few.
One notable funding has been recently announced by Xometry, an on-demand manufacturing marketplace. The company has raised $75 million to drive distributed manufacturing to reduce the reliance on traditional supply chains.
The trend of decentralising manufacturing has been growing stronger over the last few years, and the pandemic seems to have accelerated it. As highlighted by a recent survey, 59 per cent of companies believe that to build resilience, they need to geographically diversify their supply chains.
For Xometry and similar companies, now more than ever, there is a great opportunity to build momentum and bring change to how companies will outsource manufacturing in the future.
3D printing after the pandemic: The watershed moment
As the world is starting to recover from the crisis, one question remains open: When things return to normal, where will the place of 3D printing be in this new reality?
We believe that the pandemic has been the watershed moment for the 3D printing industry.
When the pandemic broke out, the technology enabled companies to keep their existing production operational and it allowed them to pivot towards creating essential products.
Now companies are being encouraged to challenge their supply chain legacies and try new avenues to remain in business. 3D printing has proved to be one of the key solutions companies can turn to when traditional manufacturing hits the wall.
Importantly, 3D printing can facilitate the shift to digital manufacturing, as a part of a digital transformation trend, particularly when coupled with the tools that enable greater connectivity and automation.
As the new reality is taking shape, it’s clear that the benefits of 3D printing for digital, localised, sustainable production will forge the path for the technology into the future of manufacturing.