Consolidation is a prominent buzzword in the 3D printing industry, a rhetoric Nano Dimension’s acquisition activity has driven over the past year through deals for Desktop Metal (DM) and Markforged.
While the latter retained its own booth for Formnext 2024, DM technology was showcased alongside Nano Dimension’s products. The company’s InnoventX binder jetting system featured prominently at the center of Nano’s Formnext booth. Nir Sade, Nano Dimension’s Sr. Vice President of additive manufacturing, told me that the Israeli electronics 3D printer manufacturer is “starting consolidation now” by integrating new companies into its portfolio.
However, calculations show that the collective market share of the four largest 3D printing companies is under 20% of the total industry valuation. This places 3D printing in the emergent consolidation phase, the first stage of the consolidation curve. In stage one, many companies operate in an industry with low barriers to entry and high levels of innovation. This precedes the latter stages of rapid growth, market maturity, and significant consolidation where a few players dominate the industry.
It is worth noting that when the industry is divided into smaller segments, such as hobbyist, mid-level, and industrial markets, the big companies will possess a larger market share. This is because the total size of each segment (the denominator) is smaller. However, this is not the case when considering the market as a whole.
Indeed, 864 companies exhibited at Formnext 2024, up from 859 in 2023, a figure that has risen steadily since the first incarnation of Formnext in 2015. This suggests that the number of additive manufacturing players is expanding, and the industry still has some way to go before it is consolidated. Hamid Zarringhalam, CEO of Nikon Advanced Manufacturing, believes additive manufacturing is “not at the beginning, but definitely not at the end” of the consolidation curve.
Looking at another metric, trade show attendance by exhibitors and visitors, can be another way to understand the industry. Encouragingly, by these measures, the industry continues on an upward trajectory, albeit perhaps not at the same rate of pre-pandemic growth.
| Year | Exhibitors | Visitors | Exhibition Space |
| 2024 | 864 | 34,404 | 54,000 m² |
| 2023 | 859 | 32,851 | 54,000 m² |
| 2022 | 802 | 29,581 | 51,148 m² |
| 2021 | 606 | 17,859 | 30,000 m² |
| 2019 | 852 | 34,532 | 53,039 m² |
| 2018 | 632 | 26,919 | 36,000 m² |
| 2017 | 470 | 21,492 | 27,000 m² |
| 2016 | 307 | 13,384 | 18,702 m² |
| 2015 | 232 | 8,982 | 14,028 m² |
Is consolidation good for additive manufacturing?
The word from the major players on the show floor is that the industry needs to consolidate to scale 3D printing further, promote adoption, and accelerate technology innovations. Fabian Krauss, Head of Growth Polymer Solutions at EOS, pointed to the large number of new entrants that have “flooded the market” over recent years, creating “over capacity.” Therefore, he believes consolidation is needed to scale applications and encourage adoption.
“From a technology provider perspective, there’s just too many players,” added Krauss, who stated that “there’s not enough money in the pond to be shared.” As such, he envisions a future where the “top five providers, all working in an ecosystem with complementing providers, is enough.”
Zarringhalam called consolidation a “good word” for industry development. He drew comparisons with the semiconductor sector, which initially had many equipment companies and production houses. As the technology became more ubiquitous, more complex developments were needed to solve problems and scale output to meet production demand.
“You cannot have lots and lots of different people trying to do this,” stated Zarringhalam. He argued that a smaller number of strong, resilient players with “pedigree, intent, technology, and the background in scaling” will be key to driving industry adoption further.
Following significant consolidation, the semiconductor industry is left with a handful of key players divided between chip designers and manufacturers (or foundries). US companies Intel and NVIDIA dominate the designer space, while TSMC in Taiwan is the primary manufacturer. Additionally, Netherlands-based ASML is the only company in the world which makes extreme ultraviolet lithography (EUV) lithography machines capable of manufacturing the most intricate microchips.
This level of consolidation has posed significant procurement challenges. Supply chain and geopolitical threats increase costs and threaten global access to the devices. As such, the US has invested substantial resources to re-shore and de-globalize the production of computer chips. In 2022, the Biden Administration passed the US CHIPS and Science Act, which invested $280 billion to bolster the production of American-made semiconductors.
Most recently, Intel was awarded a $7.865 billion grant through the Act. The new capital will support the company’s advanced packaging projects across its Arizona, New Mexico, Ohio, and Oregon facilities. These pertinent supply chain challenges starkly warn the additive manufacturing industry regarding the potential risks and financial implications of consolidation and monopolization.
Despite these risks, Sade believes acquiring new companies enables Nano Dimension to offer customers a “varied and full portfolio of solutions.” According to Sade, this allows the firm to be much more efficient by addressing more customer needs with its broad technology capabilities. “It will enable us to accelerate development and provide better solutions to the customers,” he added.
Rich Garrity, Stratasys’ Chief Industrial Business Officer, also called consolidation a “good thing.” He believes the large OEMs that will “drive the adoption of additive” want to work with companies capable of covering many of their needs. “Today, customers have a hard time navigating all the different headlines and offerings, which makes it very difficult,” he added. “Consolidation is needed to provide the breadth that these OEMs need as they try to adopt additive throughout their organization.”
The risks of consolidation
It is important to recognize that fewer options on the market can hike product prices, dissuading new customers from adopting additive manufacturing technology. Additionally, major firms building wide-ranging product portfolios could pose challenges for smaller companies and startups.
Increased competition from established players may raise the barrier of entry for new entrants, inhibiting innovation and novel application development. Smaller independent companies may struggle to secure investment or partnerships, forcing them to seek acquisition prematurely. By prioritising acquisition attractiveness over innovation, 3D printing technology advances could be stunted.
Despite this, Janis Grinhofs, CEO of pellet 3D printing startup Profabb, believes “there is still room for many players” in the industry. He does not anticipate a scenario where a few companies will dominate the market, due to specialized application needs and growing demand for low-cost systems.
At Formnext, Profabb unveiled its €24,000 GarageBot large-format pellet 3D printer, an affordable addition to the pellet-based market. Grinhofs likened the industry to a car showroom. Customers may walk in and be attracted to a high-end Lamborghini, but most walk out with an affordable and dependable Polo. “I think it’s largely similar here,” he added. While customers request compatibility with high-performance materials like PEEK, Grinhofs believes many applications can be served with PP, ABS and other commodity plastics at an affordable price point.
Low-cost 3D printers are certainly growing in prominence, cannibalizing the market share of larger, industrial 3D printer manufacturers. According to Market intelligence firm CONTEXT, entry-level 3D printer sales increased 65% YoY in Q2 2024, with revenues rising 58%. Bambu Lab, which had a packed booth all week in Frankfurt, experienced sales growth of 336% in Q2. Industrial systems, on the other hand, experienced a fourth consecutive quarter of decline, with shipments down 25% YoY.
Challenges to future consolidation
Outside Europe and North America, the sheer number of 3D printing companies operating out of Asia has challenged the rhetoric around industry consolidation.
At Formnext 2024, 61% of exhibitors were international. The show witnessed several Chinese companies exhibiting low-cost polymer 3D printing technology. This included the likes of Bambu Lab, Creality, Elegoo, Anycubic, UnionTech, and Flashforge, as well as new companies like continuous carbon-fiber 3D printer developer CFSYS. Many of these firms seek to capitalize on the growing market share of entry-level 3D printers.
Last year, Formnext South China 2023 was dominated by industrial 3D printing companies, especially in the metal 3D printing space. A third of the 275 exhibitors at the show were dedicated 3D printing enterprises, many of which offered metal laser powder bed fusion (LPBF) technology, a number of those companies exhibited at this year’s Formnext.
Notably, Farsoon showcased 3D printed tooling for vape pens/e-cigarettes, with 80% of these devices in China produced using 3D printed molds. Bright Laser Technologies was also prominent in Shenzhen, demonstrating how its technology is used to 3D print shoe molds for global sportswear giant Adidas.
Looking to the future of 3D printing, market consolidation could be restricted by key factors such as new disruptive technology or regulatory changes.
The latter could see dominant players lose market share if they are no longer able to comply with standards and certifications. This could slow consolidation if smaller players meet challenging requirements with new, more specialized technology. On the other hand, stricter regulations could favor larger companies able to meet costly requirements, pushing smaller players out or encouraging them to merge.
If the industry progresses along the consolidation curve, and the market is characterized by monopolies and strategic alliances, there would be more opportunities for disruption from new technologies. This is due to the potential for complacency among dominant players who may overlook niches and underserved markets and the creation of rigid structures resistant to change. Therefore, as the industry matures and streamlines, disruptive technology has the potential to halt further consolidation in its tracks.
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Featured image shows the entrance to Formnext 2024. Photo by 3D Printing Industry.
