Industry overview

3D printing has been around for quite some time, but it seems that it still hasn’t managed to gain the popularity and credit that it deserves as a new, revolutionary technology that has the potential to completely disrupt things like production, manufacturing, distribution etc. It might actually surprise you but the first 3D printer ever created was made back in 1983 by Chuck Hull. The 3D printing buzz however started a few years ago, and it slowly started to catch the attention of the wider public in a big way. The media has played a huge role in making “3D printing” the latest watchword in technological innovation throughout the last decade.

The 3D printing market size has grown from only $4.4 billion back in 2013 to over $17.5 billion in 2020 and is expected to finish 2021 at over $21 billion. The good news for growth oriented investors though is that this trend is just starting out. As per the research conducted by 3D Hubs in their “The 3D Printing Trends Report 2019” the 3D printing market is set to double in size every 3 years with the annual growth forecasted by analysts varying between 18.2 and 27.2 per cent. What makes things even sweeter and more interesting is that looking at total size of the global manufacturing market 3D printing still represents less than 1 per cent of it, which is a great indication for the future growth potential in this space. Up until now, investors, companies and individuals have had the perception that 3D printing is mainly a prototyping technology, but things are changing pretty fast and only those who could keep up with the change will be able to profit from it. The technology is set to become an invaluable tool for production and distribution workflows as it slowly begins to be viewed as a more matured technological solution.

Adoption and Application

The primary use of 3D printing is still heavily focused on the product development stage of the business. However, we are seeing a very meaningful growth for this new technology as it is evolving into a fully-fledged production solution.

What makes 3D printing special is that in addition to offering greater flexibility in production, 3D printing also enables businesses to create new business models that were previously either not feasible or not economically viable.

It is also important to point out that even some of the best experts in the industry are not able to accurately predict and forecast all of the potential application cases of 3D printing in the future, just because the industry is rapidly growing and the underlying technology is constantly being upgraded and improved. Thus, the scope of applications and opportunities possible with 3D printing will be increasing in line with the growing capabilities of the technology. When you look deeper into the industry you will be able to find few very interesting statistics pointing to the great underlying growth story. For example, the number of manufacturers using 3D printing for full-scale production has doubled between 2018 and 2019: 21 per cent and 40 per cent respectively. (Essentium, A survey of manufacturers). Furthermore, 79 per cent of surveyed companies expect their use of 3D printing for production parts or goods to at least double in the next 3 to 5 years. (Jabil, A Survey of 3D Printing Stakeholders in Manufacturing 2019). Looking also at the aerospace and defence sector we can see that the most popular application of 3D printing is prototyping (72 per cent), followed by repair (44 per cent), research and development (43 per cent) and production parts (39 per cent). (Jabil, A Survey of Aerospace and Defense OEMs MAY 2019).

As you can see the 3D printing industry has a lot of tailwinds that will propel its growth for the next 3-5 years. However, the industry was hit pretty hard in 2020 by the COVID-19 pandemic as supply chains were disrupted and manufacturing slowed due to the public health crisis, which reduced demand for 3D-printing products and services. Some analysts expect that the current severe contraction of orders and business volumes, which accounted for a 20% decline in the industry throughout 2020, could potentially stay for at least another 6-9 months. With that being said, we believe that this is nothing but a short-term speed bump for this otherwise really excited part of the market. Furthermore, we see the negative impact that COVID-19 has imposed on the 3D printing industry as a great opportunity for intelligent and growth-oriented investors to get into the space at a favorable price.

3D printing stocks to watch out for in 2021

1. General Electric (GE) – the company has the most 3D printing patents in the US and has been investing heavily into that space for more than 5 years now.

2. Stratasys Ltd. (SSYS)

3. 3D Systems Corp. (DDD)

4. Proto Labs Inc. (PRLB)

Sincerely,

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