When HP finally announced its entrance into the 3D printing space in 2014, it became clear that the thin wall between the then-$3 billion pond that was the 3D printing industry and the trillion dollar sea of the manufacturing industry was starting to collapse. As the sea of manufacturing came pouring in, carrying whales like Autodesk and Airbus with it, 3D printing leaders Stratasys and 3D Systems ceased to be the big fish in a small pond.
Now it seems as if the sea change that has slowly been taking place over the years is near completion as GE announced plans to purchase two of the few publicly traded 3D printing companies, Arcam and SLM Solutions, for a combined $1.4 billion.
While the looming shadow of one of the world's largest multinational conglomerates may scare the likes of 3D Systems and Stratasys, it does signal something potentially positive for the 3D printing industry as a whole: 3D printing is and will continue to be a key component of the industrial manufacturing supply chain.
GE's 3D Printing History
Like all large manufacturers, GE had been using 3D printing for some time, particularly for prototyping purposes. However, in 2012, GE Aviation acquired Morris Technologies and its sister company Rapid Quality Manufacturing (RQM). At the time, Morris owned about half of the metal laser sintering systems in the United States, giving GE Aviation significant metal 3D printing capabilities, as well as the expertise associated with the two firms.The division then went on to unveil the LEAP jet engine nozzle, which continues to be a proven demonstrator of 3D printing's possibilities for the manufacturing of end parts. By combining 18 parts into a single component, GE was able to cut the weight of the fuel nozzle by 25 percent, with the new design providing a 15 percent reduction in CO2 emissions and fuel consumption.
In order to manufacture the 19 nozzles needed for every one of the over 6,000 LEAP engines ordered by companies like Boeing, Airbus and COMAC, GE Aviation invested $50 million into its existing 300,000-square-foot facility in Auburn, Ala. GE also opened 3D printing and advanced manufacturing centers in Pune, India; Pittsburgh, Pa.; Cincinnati, Ohio; and Talamona, Italy.
Arcam and SLM Solutions
While its acquisition of Morris and RQM laid the foundation for GE Aviation as a company that uses 3D printing, the purchase of Arcam and SLM Solutions establishes GE Aviation as a 3D printer manufacturer.Germany's SLM Solutions manufactures direct metal laser sintering (DMLS) systems capable of using from one to four lasers to fuse metal powders, including titanium, steels, aluminum, cobalt-chrome and nickel-based alloys. Additionally, the firm provides 3D printing services and, through partnerships and investments, produces metal powders.
Arcam, based in Sweden, manufactures a somewhat different powder 3D printing technology known as electron beam melting (EBM), in which an electron beam directs power of up to 3,500 watts onto metal powder. With Arcam’s MultiBeam technology, this energy can be split into 100 smaller beams for a faster 3D printing process. Arcam also operates its own powder production operations and a medical 3D printing subsidiary in Connecticut. GE Aviation has already relied heavily on Arcam's technology through its subsidiary Avio Aero in Italy. Avio has numerous Arcam systems with which it 3D prints turbine blades for aircraft engines.Interestingly, both companies are publicly traded, with both SLM (Xetra:AM3D) and Arcam (OTCMKTS:AMAVF) jumping over 11 points at the time of this writing. GE (NYSE:GE), however, dropped about 1.3 percent. Both firms are nearly equal in terms of their size and profitability. Whereas Arcam made $68 million in revenue last year with its 285 employees, SLM made $74 million with its 260 employees.
Both companies will answer to President and CEO of GE Aviation David Joyce, who will grow each business in terms of manufacturing 3D printers and providing 3D printing services. Joyce will also integrate the capabilities of SLM and Arcam into GE across its divisions. Joyce said of the acquisitions, “We chose these two companies for a reason. We love the technologies and leadership of Arcam AB and SLM Solutions. They each bring two different, complementary additive technology modalities as individual anchors for a new GE additive equipment business to be plugged into GE's resources and experience as leading practitioners of additive manufacturing. Over time, we plan to extend the line of additive manufacturing equipment and products.”
GE's 3D Printing Future
GE plans to grow its additive business to $1 billion by 2020, spending $3–5 billion to develop products over the next 10 years. The $1.4 billion acquisition supplements the $1.5 billion that GE has already invested into manufacturing and 3D printing since 2010, which has seen 3D printing implemented across six GE businesses. GE has also established 346 patents associated with powder metals.
Arcam and SLM will be integrated into GE’s larger worldwide operations, though GE’s 3D printing division will be centered in Europe with each company retaining its existing headquarters, management teams and employees.
The acquisitions are part of GE’s larger attempt to reshape manufacturing—seen not only through the implementation of smart robotics, but also the Industrial Internet of Things (IIoT). To power the IIoT, GE launched its cloud-based Predix platform, with which it envisions driving everything from factories to trains.Jeff Immelt, chairman and CEO of GE, explained how 3D printing fits into this vision: “Additive manufacturing is a key part of GE's evolution into a digital industrial company. We are creating a more productive world with our innovative world-class machines, materials and software. We are poised to not only benefit from this movement as a customer, but spearhead it as a leading supplier. Additive manufacturing will drive new levels of productivity for GE, our customers, including a wide array of additive manufacturing customers, and for the industrial world.”
3D Printing's Future
Though $1 billion would account for almost one-sixth of the 3D printing industry today, Wohlers Associates estimates that, by 2021, the 3D printing industry will be worth somewhere in the ballpark of $26.5 billion. In order to grow five times the size of today's market, we should expect plenty of activity in the space, including further acquisitions and mergers.Concept Laser, another DMLS printer manufacturer, is currently up for sale, though that may have been because GE was considering their purchase. Given Airbus's own dealings with Concept Laser and the expansion of its 3D printing business, APWorks, I wouldn’t be surprised if Airbus made its own plays in the space. APWorks already provides 3D printing, engineering and consultancy services.
Though 3D Systems and Stratasys have made strides to build up their capacity for industrial 3D printing, they may need to do more to keep up in an industry that is quickly becoming subsumed by the larger manufacturing space. This is particularly true as HP looks to take on plastics 3D printing and, who knows, maybe even metals.
Regardless of what happens in terms of mergers and acquisitions, one thing is clear: neither 3D printing nor manufacturing will ever be the same.