Partner & Managing Director
Related Expertise Industry 4.0
Additive manufacturing (AM), commonly known as 3D printing, is on the verge of being widely adopted in industrial manufacturing. The world’s top companies have taken notice and are making ambitious moves to capture their share of its potentially huge value. General Electric, for example, has acquired two of the leading companies that specialize in metal-based AM technology. BMW, GE, Google, and Nikon are among the investors that are funding a Silicon Valley startup’s efforts to develop a new polymer-based AM technology. And Hewlett-Packard has developed its own polymer-based AM process.
Such moves point to the need for players across the value chain—including materials suppliers, equipment providers, and end-user manufacturers—to determine how they can successfully shape the AM ecosystem, participate in the industry, and make industrialized AM a reality.
To inform strategic discussions, BCG has developed a unique proprietary model to evaluate the size of the market for AM and forecast its growth. The model provides insights on combinations of vertical industry segments and subsegments, the parts of the value chain, materials, and regions. It can, for example, forecast the market down to the level of polymers used in aircraft interiors and the market for equipment that utilizes metal-based technology to produce orthopedic implants.
Our analysis found that the AM market is booming. By 2015, it had grown to approximately $5 billion. We forecast that it will grow at a compound annual rate of almost 30% through 2020, achieving a greater than threefold increase in size. If AM processes were adopted for approximately 1.5% of the total addressable manufacturing market by 2035, the AM market would exceed $350 billion. (See Exhibit 1.) We expect metal-based AM technologies to capture an increasing share of the total AM market.
Three industries—aerospace, medical and dental, and automotive—will account for approximately 50% of the AM market in 2020. The attractiveness and adoption of AM vary significantly among industries. In terms of their application of AM proc-esses, aerospace and medical and dental are the most mature industries. For value chain participants, the differences point to the need for an industry-level analysis that clarifies the relevance of AM technologies and how to create value by applying them.
In this report, we first assess the state of AM adoption in the aerospace, medical and dental, and automotive industries. We then discuss the actions that materials suppliers, equipment providers, and end users must take to realize the vision of industrialized AM.
AM technologies have tremendous potential to address unmet needs in industrial manufacturing. (See the sidebar “AM Addresses Unmet Needs, but It’s Not a Panacea.”) To assess an industry’s state of adoption, we categorize existing AM use cases into three maturity stages:
Using a process that successively deposits thin layers of material, AM creates 3D objects that are based on digital models. Over the past three decades, manufacturers have applied a variety of AM processes that use a selection of polymers, metals, composites, and other materials. Manufacturers have most commonly used AM processes to create prototypes, thereby reducing development cycles and lead times. Indeed, AM means “rapid prototyping” in the minds of many industry participants. Today, technological advances have enabled companies to experiment with AM in industrial manufacturing, including series production, bringing AM to the threshold of industrialization.
Users can apply AM technologies to produce designs that are not achievable with traditional manufacturing methods or that are too costly to manufacture using conventional approaches. Such complex designs include bionic lightweight and hollow structures. Moreover, AM allows users to consolidate multiple functions in a single part—say, integrating cooling channels into a mold—thereby reducing, or streamlining, assembly steps. Users can also customize products, making, for example, patient-specific implants.
Additionally, users can capture the benefits of greater flexibility with respect to production volume, location, and time. Manufacturers can use AM technologies to produce parts cost-effectively without regard to batch size. Because no additional tools are required regardless of the project, a one-off part is produced at approximately the same cost as a high-volume part. AM technologies enable decentralized production at remote locations as diverse as hospitals and battlefields.
Notwithstanding these valuable benefits, however, AM will not simply substitute for conventional manufacturing. Traditional methods will still be widely used for high-volume production. (See “Prepare for Impact: 3D Printing Will Change the Game,” BCG article, September 2013.) Companies do not have to choose between AM and conventional manufacturing, but they should find ways to combine AM advantageously with traditional methods and identify applications for which the combined methods are best suited.
The adoption rate of AM at these three stages of maturity varies among industries. Adoption depends on a complex interplay of the advantages that AM brings to each industry and the pros and cons of using AM technologies for any specific application. Consequently, value chain players need to examine the AM ecosystem industry by industry. We explore the state of adoption in each of the industries we studied, in the order of their AM maturity. (See Exhibit 2.)
Aerospace manufacturers use AM processes to optimize the shape of parts and create lightweight structures in order to reduce fuel costs. These objectives are, by far, the most important drivers of AM adoption in the aerospace industry.
Additionally, manufacturers can customize interior designs for individual airlines and rapidly complete upgrades and refurbishments. AM enables manufacturers to make spare parts readily available throughout the world—quickly, efficiently, and cost-effectively. The advantages that AM technologies bring to aerospace manufacturing are especially relevant for making components of propulsion systems and jet engines; cabin interiors; air conditioning, hydraulic, and pneumatic systems; drones; and satellites.
In this industry’s best-known example of AM, GE Aviation makes fuel nozzles for its next-generation turbofan engines. (See “Is It Time to Take the 3D Plunge? Hope Versus Hype in Additive Manufacturing,” BCG article, December 2015.) MTU Aero Engines uses AM to make metal borescope parts for jet engines designed for improved functionality. The approach—which entails tool-free manufacturing—reduces the time required for development, production, and delivery, as well as the quantity of materials and tools required in development and production.
The technology is advancing rapidly, and many more successful aerospace uses will soon emerge. We forecast that by 2030, AM will be used to make approximately 20% of critical engine parts that are produced by conventional casting today. We expect AM to be widely adopted in the production of aircraft cabin interiors as well. For example, we estimate that, in 2025, 5% to 10% of aircraft seat components will be produced by AM. We also expect that manufacturers will use AM to make drone components, bringing the AM market for commercial and military drones to $600 million to $700 million in 2025.
Medical and Dental
Using AM, manufacturers can cost-effectively produce medical and dental implants and devices. Patient-specific customization facilitates surgical procedures and promotes better health outcomes. Furthermore, AM optimizes materials usage and reduces lead times. Manufacturers can create porous implant surfaces for superior bone ingrowth and integrate multiple functions, such drug release, within a single part. (See “Biomedical 3-D Printing: A Niche Technology or the Next Big Thing?” BCG article, September 2015.) For example, Oxford Performance Materials applies MRI scan information to an AM process that rapidly produces patient-specific cranial implants using high-performance polymers. Patients benefit from fewer side effects, as well as lower surgical costs.
AM’s advantages are especially beneficial in hearing aids, orthopedics and prosthetics, and surgical guides and models. Already, approximately 90% of hearing aids sold in the US have AM custom-fitted shells, and 3D printing produces more than 17 million clear aligners for orthodontics each year.
By the end of 2025, AM will likely be in wide use in the production of orthopedic implants, dental applications, surgical guides, and medical instruments. For example, we forecast that the AM market for orthopedics and prosthetics will exceed $3.5 billion in 2025. Looking further into the future, we expect that the use of 3D printing to produce drugs, tissue, and organs will become a reality.
Automotive manufacturers have started using AM to produce tools and components. For example, to build the Rolls-Royce Phantom, BMW has used AM in series production to make more than 10,000 parts, such as plastic holders for center lock buttons as well as electronic parking brakes and sockets. The main benefit is the reduction of time and costs associated with product development. Using AM, manufacturers can both enable customization and lower costs that arise from the increasing number and complexity of product variants. Additionally, AM allows manufacturers to reduce the number of assembly groups, integrate multiple functions into a single part, and produce lightweight designs. And, by using AM to make spare parts and tools for discontinued product variants, manufacturers can reduce the need to maintain inventories of infrequently requested items.
These benefits are especially advantageous for producing interior components (for which polymers are predominantly used), structural and exterior vehicle body components (for which metals are predominantly used), and systems for climate control and engine cooling. AM in these vehicle areas is, therefore, the most mature.
However, because automotive production generally entails large volumes, we expect that prototyping will remain the predominant use in the near term. AM will be applied in series production involving relatively small volumes, such as for high-performance cars and spare parts.
We expect AM to be most widely adopted in the production of high-performance engine components (such as turbochargers), metal structural body and chassis parts (such as steering knuckles), and decorative elements composed of polymers (such as emblems). German automotive makers, in particular, appear to be moving decisively to AM, setting up engineering teams and investing in the technologies.
In the evolving AM ecosystem, stakeholders along the value chain have a role to play in making industrialized AM a reality. We discuss challenges that key stakeholders—materials suppliers, equipment providers, and end users—face and actions they must take to succeed. In addition to the key stakeholders, there are many other participants in this ecosystem, including service bureaus, software companies, and design and engineering providers. We will address these other participants’ strategic challenges in another publication.
Many large, established chemical and metal powder companies are already supplying the AM industry. We anticipate that even more materials companies will enter the AM business. Suppliers should participate in shaping the ecosystem and accelerate efforts to promote the industrialization of AM. To succeed, materials suppliers must address several challenges.
Materials for industrialized AM include both polymers and metal powders.
Polymers. AM processes use a wide variety of polymer materials. At one end of the spectrum are such basic- performance polymers as acrylonitrile butadiene styrene (ABS), a low-cost engineering plastic. At the other end are high-performance polymers, such as those of the polyaryletherketone family. They are durable, offering fatigue resistance, ductility, and chemical resistance. ABS and polylactic acid are the most commonly used polymers for the low-end filament-based processes, while polyamides are most commonly used for selective laser sintering. Some AM polymers can be reinforced with composites to create more durable parts. Not all polymers traditionally used in manufacturing are suitable for industrialized AM applications, but efforts to make them “printable” are underway.
Metal Powders. Commonly used alloys are nickel based (such as Inconel), cobalt based, titanium, or aluminum. Tool steel and stainless-steel powders are also used. Copper alloys and precious metals (mainly gold and silver) are used only in small volumes for niche applications.
In addition to addressing these challenges, materials providers must secure a strategic position in the complex AM ecosystem. They must strive to become the “spider in the web,” connecting a network of players and influencing decisions throughout the value chain. Currently, equipment providers assert greater influence in the AM ecosystem. We have, however, noticed that materials suppliers are now working to gain broader influence. To be recognized as being among the ecosystem’s most influential players, a materials supplier needs a diverse strategy that covers, for example, product development, branding and marketing, and external partnerships. In a forthcoming publication, we will detail the winning strategic moves for AM materials suppliers.
To date, companies in Europe (particularly Germany) and the US have dominated the AM industry, but we expect Asian companies will soon assert greater influence. Both established AM equipment providers and new entrants are continually improving their systems and developing new technologies that will accelerate the evolution of industrialized AM. The future of the AM ecosystem and market size will be determined largely by how these companies decide to deploy their resources to develop AM technologies. (See the sidebar “The Technology Spectrum.”)
Several AM technologies are available for manufacturing objects, using materials such as polymers, metals, and composites, with varying suitability for specific applications. These technologies are differentiated mainly in terms of the initial raw-material state or shape (for example, liquid photopolymer, filament, or powder) and the bonding principle (for example, melting or gluing).
ASTM International groups the various AM technologies into seven categories. We discuss them below in the order of their current relevance for use with polymer and metal materials and indicate other materials for which they are applicable.
The following categories are applicable for polymers:
The following categories are applicable for metals:
To examine how the AM ecosystem is evolving, we distinguish between providers of polymer- and metal-based technologies.
Polymer-Based Technologies. Established AM equipment providers (Stratasys, 3D Systems, and EOS, for instance) are investing significant resources in the development of polymer-based technologies for industrial applications beyond prototyping. At the same time, leading companies from outside the AM industry have made major investments to enter the industrialized AM space. For example, a group of investors that includes BMW, GE, Google, and Nikon has invested more than $220 million in support of Carbon, a Silicon Valley–based startup, in its efforts to develop continuous liquid interface production (CLIP) technology.
Companies active in the conventional two-dimensional-printing industry are ramping up their efforts to provide AM technology. Hewlett-Packard has introduced commercial 3D printers that use its newly developed Multi Jet Fusion (MJF) technology. In addition to Hewlett-Packard, other two-dimensional players are accelerating efforts. Ricoh, for example, is marketing machines developed by Aspect, a Japanese company. Other printing companies are likely to introduce systems soon.
To determine which polymer-based technologies have been receiving the most attention, we analyzed more than 15,000 news and blog articles published during the past three years. The technologies mentioned most frequently were vat photopolymerization, 44% of articles, material extrusion (ME), 38%, and powder bed fusion (PBF), 34%.
To understand which AM technologies will become most relevant in the near term, we conducted a detailed analysis of the intellectual property landscape. We examined AM patent activity from 2000 through 2015 by investigating 8,145 patent families. We found a significant increase in patent applications since 2011 for both types of thermoplastic-based processes: the number of PBF-related patent applications rose by more than 60% per year, and the number of ME-related patent applications more than doubled annually. Because patent activity is a good indicator of a technology’s future relevance, our findings suggest that PBF and ME will continue to gain importance.
To examine how the effectiveness of polymer-based technologies will evolve through 2025, we applied insights from our research and more than 150 interviews with AM industry stakeholders to develop a technology roadmap. (See Exhibit 3.)
Today, selective laser sintering (in the PBF technology group) and fused deposition modeling and fused filament fabrication (in the ME technology group) are the most effective polymer-based processes for industrialized applications. MJF, the newer technology, also seems very promising for industrialized applications. Our analysis found that these three thermoplastic-based processes will become even more dominant through 2025, as groundbreaking innovations enhance their effectiveness for manufacturing functional parts.
Higher processing speeds for PBF will be promoted by advanced strategies for recoating the powder bed and better fusing processes (for example, the use of new diode laser arrays to fuse powder). ME enables continuous reinforcement with composite materials, so it has high potential for producing parts that require superior mechanical properties. However, the technology is limited in terms of speed, quality, and the realizable complexity of part geometries. Because there is significant potential for multicolor and multimaterial printing at high speeds, we expect MJF to be more widely adopted.
In contrast, traditional vat photopolymerization processes (such as stereolithography), which are already mature, will most likely not see significant improvements in their ability to produce, for example, parts that require superior mechanical properties. CLIP technology has the potential to enable higher speeds by moving beyond a layer-by-layer process. However, the technology faces challenges with respect to mechanical properties.
Metal-Based Technologies. Established machine tool makers, such as Trumpf, have entered—or reentered—the market for AM equipment, seeking to lead the development of new technologies. Large manufacturers, including Siemens, are making significant investments that will accelerate the adoption of these technologies. Moreover, GE’s moves to acquire Concept Laser and Arcam, which are among the leading equipment providers for metal-based AM, are likely to promote the industrialization and widespread adoption of AM. GE’s combined investment of $1.3 billion in these two companies signifies a strong endorsement of the potential for metal AM, which will attract other companies to the technology. GE’s recent acquisitions also allow it to span the AM value chain from end to end. For example, Arcam includes AP&C, a leading AM powder manufacturer, and GE separately acquired Morris Technologies, a leading service bureau.
Metal PBF processes—laser melting and electron beam melting (EBM)—have emerged as the leading metal-based AM technologies for industrial part production. Both technologies are used for aerospace, medical, and automotive applications. Our analysis indicates that, owing to the use of faster fusion technology and better process automation, these technologies will maintain their dominance through 2025. (See Exhibit 4.) For example, we expect the next generation of laser-based systems, using diode laser arrays, to increase melting speeds by as much as a factor of 30.
EBM and laser melting are not competing processes. Rather, they offer different advantages for different types of applications. End users must understand the pros and cons of each process in order to decide which to adopt. For example, while laser melting enables greater accuracy, EBM currently has the advantage in terms of build speed. EBM’s higher build temperature means that parts encounter minimal internal stress, but the higher temperature requires long periods of heating and cooling before and after the build process.
Directed energy deposition (DED) is an established and well-known process for coating applications. However, its AM use is limited to producing simple shapes. We expect that DED will stay relevant for specific applications, such as repairs. New variations of DED (for example, those that use a plasma arc to melt alloy wire) enable high-speed production and the manufacture of large parts. However, DED processes cannot be used to create complex designs. Hybrid processes that combine DED and conventional computer numerical control face challenges with respect to accuracy and process stability.
Equipment providers will likely continue to improve binder-jetting processes for metal powder. Even so, these processes will still compare somewhat unfavorably to PBF in their ability to produce strong parts. We expect that binder-jetting processes will be relevant for niche applications.
New metal processes being developed—for example, particle-jetting or filament-based methods—are not expected to offer game-changing advantages in the short or medium term. We see multiple new startups targeting a new field of low-cost metal AM, a trend that could have implications for the industrial segment in the long term.
Taking Action. As the technologies evolve, equipment providers must do the following to promote success:
Additionally, equipment providers must address their strategic position in the AM ecosystem. To date, most AM equipment has been sold within a closed system in which manufacturers provide both machines and materials to the users. The manufacturer calibrates the machine to a specific material and sells the material at a significant markup. Customers are willing to accept such a system in the early—small-scale—stages of adopting a new manufacturing process. In the future, however, customers for industrialized AM will demand an open system in which equipment providers sell the machines and materials suppliers have direct access to customers.
The trend toward an open system is already evident for equipment that uses metal-based AM processes, but a closed system still predominates for polymer-based processes. As AM processes become more widely adopted for high-volume industrial production, open systems will likely prevail throughout the industry. To adjust to that shift, equipment providers should seek ways to maintain their margins. They could, for example, leverage their knowledge base and expertise to offer advisory services to companies seeking to adopt AM processes. It is imperative that they be established as strategic partners—not simply equipment suppliers—in the transition to AM.
Across industries, AM technology end users—that is, manufacturing companies—are extending the scope of AM processes beyond R&D. Their success stories will help create excitement and promote wider AM adoption, accelerating its industrialization. To make the vision of industrialized AM a reality, end users must undertake the following:
To address these challenges, users should answer the following questions:
The answers will provide the basis for pursuing the following four-step, structured approach for transitioning to industrialized AM and quantifying the economic benefits.
Now is the time for players along the value chain to investigate the opportunities that AM offers and make industrialized AM a reality. BCG supports these efforts through a unique network of experts and external partners that includes major research institutions and specialists in materials, processes, and equipment. For example, a materials supplier that aims to become a leading player in the industrialized AM ecosystem worked with our experts in workshops and day-to-day projects to develop an ambitious strategy and accelerate its achievement of aggressive targets. In another instance, an end user’s team visited the Paris model factory in BCG’s Innovation Centers for Operations (ICO) to learn about the potential of industrialized AM. In the ICO’s model factory, the executives and staff experienced and tested new AM technologies, as well as other Industry 4.0 technologies. Gaining hands-on experience helped the team understand the advances that AM has made possible and how these use cases can be applied to their own operations. By understanding the state of the AM art and how the technologies will likely evolve, companies can seize the opportunities and take part in shaping the industry.