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3-D Printing Market Expected to Grow 40% Annually

The technology will make good on its promise to enable the Third Industrial Revolution, says the investment firm Ark Invest (New York City).  

Brian Buntz

ARK Invest

Sure, 3-D printing has been hyped. But in many ways, the technology is undervalued, maintains ARK Invest, which anticipates that the annual growth rate for the technology will be approximately 40% for the next five years. "It is $5.5 billion dollars today. We see it going to $40 billion by 2020," says ARK Invest analyst Tasha Keeney, who recently wrote a white paper on the subject.

Little Consensus on the Technology's Potential

Global estimates for the 3-D printing market vary widely according to various estimates. The most optimistic firms--such as McKinsey and ARK used top-down models to arrive at their figures. "The highest estimates were from McKinsey, which is predicting that the market will expand to be worth anywhere from $180 to $490 billion by 2025," Keeney says. "We think that most analysts in the lower end of this range are taking today's growth rates and extending them outwards. But ARK and McKinsey are estimating the percentage of the market that could adopt 3-D printing and derive their calculations for the future market size from that."

Using a top-down projection of 3-D printing's future could be wise. Consider how firm Wohlers, which has used a bottom-up approach, has nearly doubled its estimates for the 3-D printing market in 2020 timeline twice. "Their 2012 estimate was $6.5 billion. In 2013, their estimate was $10.8 billion. And in 2014, it shot up to $21 billion." Wohlers' 2016 estimates are expected later this year.  

In any case, it is difficult to make projections about the market size because 3-D printing is still in its infancy--despite having been around in some form or another for decades. "If you look at the total addressable market, -- prototypes, tools, molds, and end-use parts--it is the hundreds of billions of dollars," Keeney says. "But the penetration is still relatively low.

While 3-D printing is most commonly used for prototyping, there is still considerable room for growth in this market niche as well as in other sectors. "The end-use-parts market is currently next to nothing. That is the next wave we see as being the largest addressable market." A good example is the shoe market. Already, companies like Under Armour, Nike and Adidas are beginning to use the technology in shoes. Expect more 3-D printed end-use parts in the consumer and medical sectors to follow.

Despite the tremendous potential, in 2015, the public stocks of many of the big 3-D printing company were discounted, including major players Stratasys and 3D Systems. "There is a massive opportunity for growth that is not being recognized. Right now, the market is at the sweet spot of the saddle adoption curve," Keeney says.

Big Potential amidst Big Challenges in Medicine

One of the most promising market niches for 3-D printing is medical device manufacturing and healthcare at large. "Some market niches have adopted 3-D printing early. The entire hearing aid market uses 3-D printing. None of the companies that stuck with traditional manufacturing are still around," Keeney says, adding, "the entire industry adopted 3D printing within 500 days." In addition, 3-D printing is used in Align Technology's Invisalign plastic teeth molds that provide an alternative to metal braces

There is a lot of movement as well in the 3-D printing software space. The technology can be used to assist with surgical planning and to make custom-fit orthopedic implants, for instance. This can save both money and time. "In the case of knee implants, for example, sometimes orthopedic surgeons would have to carve away bone to get knee implants to fit in some patients. Custom implants would do away with the need for that."

Still, there are also unique hurdles for medical applications of 3-D printing--regulation being one factor that can slow adoption of the technology. The company Materialise, for instance, had developed a unique technology that made it possible to pre-plan knee replacement surgeries and 3-D printed surgical guides using 2-D x-rays rather than CT or MRI scans. Late last year, the company received a Not Substantially Equivalent (NSE) letter from the FDA, effectively putting on hold the marketing of the technology in the United States.

One of the most promising applications of 3-D printing technology is its use to produce tissue. While there have been a number of successful clinical examples of this--for instance--the implantation of 3-D printed tracheas, don't expect 3-D printed organs to do away with the need for organ transplants in the near future, Keeney says.

The company Organovo has gotten considerable attention for its ability to produce liver tissue samples. "The samples have been used mostly for toxicity testing so far," Keeney says. "I see that as a fascinating application of 3D printing. It could potentially replace animal testing, although, right now, it is being used as a test before animal testing." It's anybody's guess when the technology might be ripe to create a 3-D printed functional liver, but it is not likely to be anytime soon. "The main challenges aren't even on the 3-D printing side but also the cellular culture side," Keeney says.  

Other challenges remain for the 3-D printing market overall, Keeney says. The current choice of materials is somewhat limited, but many companies are working on developing new ones--especially on 3-D printed metals.

Another general challenge is that there is a significant learning curve when it comes to 3-D printing. According to a McKinsey survey, about 40% of manufacturers were unfamiliar with 3-D printing beyond press coverage.

Still, for companies choosing to embrace 3-D printing, the decision will be well worth it. As the recent ARK white paper summarizes, "the world has seen only a glimpse of the technology's ultimate potential." While the technology has been overhyped in the past five years or so, the technology is poised to make good on its promise to enable the development of custom and better-designed products.

Learn more about cutting-edge medical devices at BIOMEDevice Boston, April 13-14, 2016.

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