Why no consolidation in the 3D printing market?

In a recent report, IDTechEx asked the question: Why is the 3D printing market not consolidating? Analysts have been predicting significant consolidation for the past 10 years. So what gives?

IDTechEx noted that major acquisitions by leading companies such as Stratasys and 3D Systems seemed to suggest the start of consolidation. This was in 2010 and 2012. Although 3D Systems made 13 acquisitions between 2011 and 2012, this did not lead to a market trend towards consolidation.

The report goes on to explain that over the next decade, these early signs of consolidation did not bloom. Instead, new companies like Carbon, Formlabs, and Desktop Metal have expanded the range of 3D printing technologies. They “have become headline-grabbing unicorns of the additive manufacturing market.” Other established companies like HP and GE have thrown their hats into the 3D printing circle. Now, in the 2020s, mergers and acquisitions have once again raised expectations of consolidation. IDTechEx noted that this simply does not happen.

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We sat down with Sona Dadhania, technology analyst at IDTechEx and author of the report, to understand why the 3D printing market hasn’t really consolidated yet.

Design News: How do 3D printing companies grow their customers and their technology? Is there a consolidation going on?

Sona Dadhania: It should be noted that within additive manufacturing, companies choose to acquire other companies to expand their technology portfolio, material options and customer base. For example, 3D Systems acquired Kumovis, Titan Robotics, and do polar in 2022, while in August 2022 Stratasys acquired Covestro Additive Manufacturing. In 2021, Desktop Metal acquired six different companies, including binder jet printer maker ExOne. However, these acquisitions are not the only source of growth for most additive manufacturing companies.

Most companies are focused on expanding their customers in established verticals, such as healthcare and aerospace, and reaching new customers in industries that are still in the early stages of adoption. 3D printing, such as consumer goods. IDTechEx predicts that this expansion will drive the 3D printing industry to exceed $41 billion by 2033.

An important strategy for customer expansion is to expand material options for 3D printing to include higher performance polymers and metals for more demanding applications like space. Expanding the portfolio of additive materials is essential for additive manufacturing to reach its full potential; engineers will need a diverse toolbox of materials to meet different applications and challenges. Additionally, many companies are developing new printing technologies whose advantages over existing technologies make them better suited for certain applications.

DN: Is there anything unique to 3DP that discourages consolidation?

Sona Dadhania: A unique aspect of additive manufacturing is the amount of innovative 3D printing technologies that come to market each year. The industry has gone beyond the classic seven printing processes, with many improvements on incumbent technologies and brand new technologies coming to market over the past five years, such as Selective Thermoplastic Electrophotographic (STEP), multi-material jetting, viscous lithography manufacturing (VLM), etc. It’s important to note that these printing technologies typically come not from established market leaders, but from start-ups, which receive significant public attention and investment interest.

Additionally, end users are thinking more critically about the added value 3D printing brings to their business and supply chain, whether as a source of custom tools, jigs, and fixtures; as a method for constructing complex designs otherwise impossible to achieve; or as a production tool capable of manufacturing at many different volumes. Several companies have formed to respond to these new applications, some in specific verticals and others with disruptive business models. For example, it is becoming increasingly popular for inventors of new printing technologies to keep their technology in-house to do contract manufacturing for end users, rather than selling their printers. Many end users are approaching these newcomers for their applications rather than the incumbents. This again indicates that the 3D printing industry is not consolidating.

DN: Is it just too early in the growth of this industry for major consolidation?

Sona Dadhania: It is difficult to place additive manufacturing, as an entire industry, at a certain stage of growth or maturity. There are so many different 3D printing technologies, all categorized under the same additive manufacturing umbrella; in fact, IDTechEx segments our 3D printing predictions into seventeen different printing technology categories. Some technologies like stereolithography are thirty years old, while others have only been on the market for a few years. Each of these individual technologies is at different stages of maturity; while some technologies may be ripe for consolidation, others have only just begun to develop.

DN: Any other comments?

Sona Dadhania: Although this discussion has mainly focused on printing technologies, it is important to note that additive manufacturing is not limited to the 3D printer. There is a whole ecosystem enabling the growth of additive manufacturing, from materials and software to post-processing equipment and services. The development of these areas affects the trajectory of additive manufacturing as a whole. For example, there may come a time when 3D printer manufacturers consolidate significantly, while new companies continue to move into software and post-processing. It’s a byproduct of the multifaceted nature of the 3D printing industry.

Additionally, global supply chain disruptions present exciting opportunities and challenges for 3D printing. On the one hand, the crisis is popularizing the concept of distributed manufacturing, of which additive manufacturing is a central element. On the other hand, these disruptions make it difficult for 3D printing companies to do business globally, by making shipments of goods longer and more expensive. It remains to be seen whether 3D printing companies as a collective can capitalize on this opportunity to grow the additive manufacturing industry.