Die strategische Bedeutung von Additive Manufacturing Fit for Additive Manufacturing Oensingen, June 22 nd, 2017 Photo: FIT AG
Roland Berger is a trusted advisor for Additive Manufacturing (AM) in the Engineered Products & High Tech industry AMnx @ Engineered Products & High Tech Competence Center 51 offices in 36 countries 2,400 employees > Founded in 1969 as a one-man business, we now have successful operations in all major international markets > Largest consulting firm with European/German roots > Among the top 3 players for strategy consulting in Europe, number 1 for mechanical & plant engineering > Team of 2,400 employees worldwide, of whom 180 are partners Aerospace & defense Energy equipment Long lifecycle products Digital technologies B2B electronics > Additive Manufacturing is part of our digitization initiative > Roland Berger published two AM studies in 2013 and 2016 available on our homepage > Relevant project experience ever since forms the basis for the updated study at hand > Our consulting services for AM range from business development to operational excellence Source: Brand Eins; Roland Berger 2
Our project experience in the field of AM reaches from strategy development over potential assessment up to M&A projects Project references Overview AM industrialization strategy Turbine OEM > Development of an entire AM industrialization strategy > Technology and supplier selection > Production cost estimation Market entry strategy for AM of ceramic components Component manuf. > Market entry strategy for AM of ceramic cores for turbine blade production > GAP-analysis on competences > Highlighting of strategic options AM serial concept development Energy equipment OEM > Scouting of parts suitable for serial production > Production process design > Benchmarking of PBFL 1) systems Growth strategy AM component manufacturing Powder & process supplier > Market entry strategy into manufacturing of high-tech components using AM > GAP analysis and portfolio strategy Market analysis on PBFL 1) equipment market Powder supplier > Assessment of the PBFL equipment market & identification of potential acquisition targets > Due diligence PBFL equipment manuf. Commercial Due Diligence on AM component manufacturer Component manuf. > Assessment of a potential acquisition target in AM contract manufacturing > Market dynamics & competition > Operations & synergy potential Commercial Due Diligence on a PBFL 1) equipment manufacturer PE-fund Potential assessment in mold making Consumer goods manuf. > Assessment of attractiveness of a potential acquisition target > Analysis of market positioning, business plan, capabilities (e.g. innovation), etc. > Identification of AM potential for mold making in consumer goods manuf. > Evaluation of technical and commercial feasibility Div. Others > Market entry strategy > Technology radar > Corporate strategy > Target search > Component/portfolio strategy >. 1) Powder Bed Fusion by Laser Source: Roland Berger 3
Using Additive Manufacturing technology, three-dimensional solid objects of virtually any shape can be made from digital data Definition and advantages Definition > Additive Manufacturing (AM) is a process of making a three-dimensional solid object of virtually any shape from a digital model > AM uses an additive process, where materials are applied in successive layers > AM has a 26-year history for plastic objects the capacity to make metal objects relevant to the engineered products and high tech industries has been around since 1995 Key advantages > Direct production from CAD data > Freedom of design > Complexity for free > Part consolidation > Elimination of tooling > Max. material use > Production cost independent from batch size > New manufacturing processes, e.g. in repair, and materials Source: Roland Berger 4
Powder bed fusion is the most frequently used technique for printing metal objects Powder bed fusion (PBF) Laser system Powder coater Scanner system Loose powder Build plate PROCESS STEPS AND COMMENTS > Powder bed fusion (PBF) is the accepted ASTM 1) term for an additive manufacturing process where a point heat source selectively fuses or melts a region of a powder bed. The process is also known as direct metal laser sintering (DMLS) or selective laser melting (SLM) > PBF is the most frequently used technique: Powder is dispensed Parts are selectively melted via laser Build station is lowered and new powder is dispensed > PBF systems use either a laser beam (very often) or an electron beam (rarely) to melt regions of a powder bed > Electron beam PBF enables higher build rates, but surface quality and choice of materials are more limited Build station piston SLM 250, 1:40 1) American Society for Testing and Materials (ASTM), www.astm.org Source: Roland Berger 5
From today's point of view the "paths of disruption" only have a minor impact on production This will change in the future! Paths of disruption for Additive Manufacturing Direct production from CAD data Freedom of design Complexity for free Part consolidation Elimination of tooling Prod. cost independent from batch size New manufacturing processes Path of disruption Examples Limited impact Source: EOS, Roland Berger, NASA Individual products > Prototyping > Mass customization Medical products Jewelry Gimmicks > Small series production Strong impact New geometries & materials > Integration of new, enhanced functionalities (more efficient products) in high tech materials > Development of new materials/material properties > New repair strategies New business models (B2B, B2C ) Decentralized production > Industrial production on demand production by quantity by location (decentralized) > Home printing/production > Outsourcing to partners 6
Together with modern CAD/CAM technologies AM as former prototyping technology allows rapid processes and indiv. products AM for individual products Examples Implants Prototypes Source: EOS Source: FIT Source: toolcraft > Production of implants in plastic or metal materials > Implant is custom made based on scan data > Rapid production of the implant over night > Typical implants: dental, hip joints, knees, fingers, skull or back bone implants > Production of technical prototypes for test purposes > Integration of new AM design features > Rapid process with direct transformation of CAD data into products no tools required > Small series production, e.g. for Formula 1 Advantages > Economic production of prototypes and small series > Rapid process chain due to direct transformation of CAD data or scan data into products > Flexibility to change designs Life Style Source: EOS, Kerrie Luft Source: ingenieure.de > Ongoing trend in our society towards more customization and willingness to pay for individual products > Often combined scan and print processes are used Key enabler for accelerated product development and testing processes Source: Roland Berger 7
AM offers new opportunities for lightweight design, highly efficient products and materials with improved characteristics AM for individual products Examples Lightweight design Highly efficient products Source: FIT Source: GE Source: Morris Technologies Inc. Source: Rennteam Uni Stuttgart > Design of lightweight components due to "bionic" design with optimized exterior (left) or inner lattice structure (right) > Significant saving potential in combination with light weight materials like Aluminum or Titanium > Ability of AM to "print" complex geometries out of high tech materials, like Hast-X or Inconel, is used to create smarter products. The examples shows gas turbine nozzles with optimized mixing and cooling geometry for more efficient combustion processes Advantages > Lightweight design and new ways of manufacturing even with complex materials > Creation of new materials with enhanced characteristics > Improved geometries for more efficient products New materials Source: IQ-Evolution > The high power cooler for diode lasers (left) combines two different metal materials and offers an outstanding cooling performance in an compact design > Amorphous metals combine high strength and high hardness with high elasticity and high plasticity and further offer high magnetic susceptibility with low coercively and high electrical resistance AM is a key enabler for new high-tech products Source: Roland Berger 8
Bionic Design is the design key leavers for ultimate weight reduction and minimized life cycle cost Bionic Design in the context of AM Inspired by nature Water lily Bone of a bird > Natural organism contain no solid parts, but a surface of varying thickness and beneath a lattice structure > Material is only applied were it absolutely needs to be > Design determined by functionality and persisting environment solves real world problems Micro cooler (A) Engine block (B, C) Finger implant (D) > Components with bionic design have superior weight to stability ratio, can be flexible and sturdy at the same time > Applicable to maximize surface (A), to maximize strength (B) or to minimize material use (C) > Used for implants with osseointegration (D) Complex bionic design structures can be only manufactured by AM Source: Roland Berger, Within, EOS 9
"Mobile" production and repair are of high interest for e.g. military applications, decentralized production will impact service business AM for decentralized production Examples Mobile printing AM for repair Container vessel triple E class 3D printed tools and fighter plane nose Example: Containerized print center for ground forces > Decentralized production of spare parts on container vessels, oil platforms, space stations, aircraft carriers or in containerized solutions for the ground troops > Limitations with regard to materials and post processing need to be considered > Cheap and fast printing of simple plastic assembly tools by the maintenance staff, e.g. bending tools, gauges etc. Advantages > Rapid availability of spare parts even in remote locations > Fast and cheap production of support tooling for maintenance > Further decentralization of production Decentralized production Professional AM Factory by RedEye > AM supports in general the decentralization of production as the production cost are independent from the lot size, but still AM production cost are significantly higher > Labor cost nearly of no relevance > Decentralized production of e.g. spare parts in 3 rd parties or OEM AM factories definitely is a near future application AM will impact the future supply chain design Source: Roland Berger 10
Global AM market is expected to continue double digit growth until 2022 Growth rates of up to 35% per year expected by researchers Global AM market Development AM market 2000-2022 [EUR m] Machine tool market 1) [EUR bn] Wohlers Associates Canalys MarketsAndMarkets Smithers Pira AM market [EUR bn] 41.1 0.5 00 33.0 35.5 ~30% metal systems 0.4 02 0.5 04 1) World production excl. parts/accessories 46.0 0.8 06 54.2 AM Systems Materials CAGR ~20% 0.9 08 30% 15% 1.0 10 66.7 68.1 59.7 48.0 Services 55% 4.7 5.5 3.1 1.7 12 14 15 16 11.3 17 18 14.2 10.2 21.0 15.6 28.3 24.1 FORECAST 19 CAGR 2016-22 20 19.0 21 22 34% 33% 31% 29% 26% 24% 21% > Compared to the machine tool market, the '16 metal AM system market is still small at less than 10% > For '04 to '16, the overall AM market showed an ann. growth (CAGR) of c. 20%, in '16 growth softened, mainly due to weak performance of polymer players Stratasys and 3D Systems > Based on different market reports, the market is expected to multiply by factor two to five until '22 > FX rates per Bundesbank, forecast based on 05/17 EUR/USD rate Source: Expert interviews; Wohlers Associates (2017); VDW (2016); Canalys (2016); MarketsAndMarkets (2016); Smithers Pira (2016); Roland Berger 11
Several new metal AM technologies are emerging next to powder bed fusion by laser/electron beam or DED Simplified overview PBF 1) By Laser By EB 2) DED 3) Powder by laser Wire by laser/eb Jetting Extrusion Binder Jetting Build principle Production capabilities shown in labenvironment Manufacturing readiness for AM Key materials Material properties Post processsing required Build costs Low High degree required Full rate production Proof of concept High Low degree required Thermal energy by laser fuses regions of a powder bed Manuf. readiness reached for selected industries Al, Ti, Ni-alloys, CoCr, Steel HT 4) /HIP 5) Machining Surface treat. Thermal energy by EB 2) fuses regions of a powder bed Manuf. readiness reached for selected industries Al, Ti, Ni-alloys, CoCr, Steel Machining Surface treat. Fusion of powdered material by melting during deposition So far mainly used for coating, AM only in niche appl. Ti, Ni-alloys, Steel, Co, Al Ti, Ni, Steel, Co, Al, W, Zr-alloy, CuNi HT 4) Machining Surface treat. AL 8), Steel 9) Cu, Inco, Steel, (others incl. Ti in development) HT 4) (/HIP 5) ) Machining Surface treat. WC, W, CoCr, Steel/ Bronze, Steel, Inco, non-metal molds Low High Low High Low High Low High Low High Low High Low High HT 4) Machining Surface treat. Fusion of wire fed material by melting during deposition So far mainly used for coating, AM only in niche appl. Deposition of molten metal or metal powder in carrier liquid X-Jet Vader HT 4) (/HIP 5) ) Machining Surface treat. 6) 7) 8) 9) Dispense of material through nozzle to form a green part Production capabilities shown for prototyping Joining powder by bonding agent to form a green part Manufacturing readiness reached for niche appl. HT 4) (/HIP 5) ) Machining Surface treat. Core application Industries Suppliers (selection) Aerospace, Turbines, Med-Tech, dental, Automotive Concept Laser, EOS, SLM, DMG MORI, Trumpf, Renishaw, Realizer Aerospace, Turbines, Med-Tech Arcam Aerospace, general MRO related business Optomec, DMG MORI, Mazak, RPM Innovations, Trumpf, BeAM Aerospace, general MRO related business Sciaky, Trumpf, OR Laser, Norsk Titanium Precision eng. 9), prototyping 8) Vader Systems, X-Jet Aerospace, Turbines, Med-Tech, Auto Desktop Metal Aerospace, Turbines, Med-Tech, Auto, Arts & Design Desktop Metal, ExOne Established technologies Incumbent technologies 1) Powder Bed Fusion 2) Electron Beam 3) Direct Energy Deposition 4) Heat treatment 5) Hot isostatic pressing 6) might not be needed for X-Jet process 7) Cost effectiveness potential by claim, so far no proof in industrial context 8) VADER process (Magnetojetting) 9) X-jet process (Nanoparticle Jetting) Source: Company information; Expert interviews; Roland Berger 12
Ultra high speed laser metal deposition enables fast and precise part build-up with very small heat affected zone Ultra High Speed Laser Metal Deposition Build-up without support structures Fe/Ti pairing 50 µm Technology description > DED 1) variant with very thin layer height of down to 10 µm (typical layer heights in conventional DED in between 200 µm and 2.5 mm) > Thin layers are achieved by very high application speeds of up to 200 m/min > Rotating build plate, thus parts need to have rotational symmetry for high application speeds > Deposition rates of up to 2 kg/hr while still allowing for thin-walled designs > In-situ laser polishing possible Advantages by claim > Very small heat affected zone within the substrate is beneficial for multimaterial combinations such as Fe/Ti, Fe/Al or Fe/Cu and coating processes (e.g. applying a wear resistance coating onto the final part) > High application speeds while still allowing for intricate designs > Comparably cheap equipment compared to powder bed processes > High bulk and surface quality (compared to conventional DED) Part cross section with 1 mm wall thickness 1) Direct energy deposition Final part (INCO625) Evaluation > Powerful technology for niche applications (printing of intricate designs with rotational symmetry and multi-material combinations) > Small heat dissipation within the substrate beneficial for specialty processes such as creating multi-phase materials Maturity level 1 2 3 4 5 6 7 8 9 10 Impact Likeliness Time to market Proof of concept phase Source: Desktop Metal; Roland Berger 13
Norsk Titanium uses a wire-based DED process with plasma as energy source to produce large structural parts for aerospace Rapid Plasma Deposition technology Build chamber of a Merke IV-Machine Near net shape part and final part after post-processing Strategic partners Build process Merke IV - Machine Titanium material (wire) Technology description > DED using Titanium alloy wire and plasma torches as heat source, Material is molten onto substrate while shielded by Argon gas > Coarse resolution with layers being 3-4 mm high and 8-12 mm wide > Deposition rates of 5-10 kg/h and max. work piece size of 900x600x300mm Current status > Commercialization in pilot stage so far no systems available for purchase > In 2015, New York State invested USD 125 m through private-public partnership with Norsk to build industrial-scale AM facility in Plattsburgh, NY (to be completed 2nd half 2017) Norsk plans to invest over USD 1 bn over 10 y > First Titanium structural Aerospace parts produced by Norsk received FAA approval in Feb 2017 and will be flying on Boeing 787 Dreamliner Evaluation > Technology with strong market potential Favorable business case for aero structural parts due to high buy to fly ratio and comparatively costly machining Significant volumes in large structural Titanium parts in Aerospace anticipated to shift to AM within the next 10 years > Technology differentiated against powder bed by size,cost and application niche Long-term differentiation potential against competing DED technologies however unclear Impact Maturity level Likeliness 1 2 3 4 5 6 7 8 9 10 Time to market Available Source: Norsk Titanium; Roland Berger 14
Desktop metal recently released a table-top metal 3D printer for prototyping which uses an extrusion principle Metal additive manufacturing by extrusion Material cartridges Technology description > Formation of green part by process similar to conventional FDM Extrusion of specially formulated bound metal rod trough a 0.4 mm nozzle onto heated build plate (metal powder in binder matrix), deposition rates of 16 ccm/h > Subsequent sintering to form final part with density above 98% > Max. part dimension after shrinking 255x170x170 mm > Available materials are Cu, INCO 625, Steel 4140 & H13, Kovar F-15, and Stainless Steels 316L and 17-4PH Other materials incl. Ti, W, Bronze, high performance steels such as MAR 18Ni300 and magnetic alloys in dev. Bound metal rod material Advantages by claim > Safe to use in an office environment and easy operation (integrated software) > Comparatively cheap hardware (USD 120 k for printer, de-binder & oven) > Support structures can be removed by hand > 80% lower material costs (powder with wider particle size distribution) Extrusion of specially formulated bound metal rods trough heated nozzle Investors Sintering of green part to form final part Manual removal of support structures Sintering oven Evaluation > Limitation to prototype work (target segment) due to: Unclear dimensional accuracy and porosity control Limitation in build volume and feature resolution > Comparatively cheap compared to other metal printers and unique niche within prototyping (no complicated/hazardous powder handling) Maturity level Impact Likeliness 1 2 3 4 5 6 7 8 9 10 Time to market Available for preorder Source: Desktop Metal; Roland Berger 15
Desktop metal announced to introduce a binder jetting AM system for mass production of metal parts Planned introduction in 2018 Metal additive manufacturing by Single Pass Jetting (SPJ) Sintering oven Technology description > Binder jetting with higher productivity due to single pass application technology combining powder deposition, powder compacting and binder application in one combined unit that traverses bi-directionally over the powder bed for enhanced productivity > Usage of anti-sintering agents for easy removal of support structures > Resolution of <50 µm voxels, build area of 303x330x330 mm > Integrated software suite for printing and sintering "Production" machine and sintering ovens Print head Deposition + compacting + drying (identical on opposite) Microwave enhanced furnace Advantages by claim > Very high deposition rates of up to 8200 ccm/h c.100 times faster than laser-based systems > Lower material costs as powder with greater dispersion in particle size (e.g. conventional metal injection molding) can be used compared to PBF-systems which require a uniform particle size distribution Powder deposition Powder compaction Bi-directional application unit Powder bed Binder application Drying Sintered 4140 steel 30 µm Evaluation > Interesting technology for large scale production of parts which are less complex in geometry > BMW one of three lead investors could indicate future adoption in automotive small series production > Potential to process intermetallic compounds as material does not get heated over melting temperature Investors Maturity level Impact Likeliness 1 2 3 4 5 6 7 8 9 10 Time to market Available for preorder (release '18) Source: Desktop Metal; Roland Berger 16
Technology choice is a trade-off between lot-size, costs per part and desired part performance Complimentary technologies evolving Additive manufacturing technology application niches - schematic Part performance Part performance PBFL DED powder DED wire Lot size Lot size Part performance MJ MJ Extrusion BJ BJ Extrusion PBFL DED - powder DED - wire Extrusion PBFEB Powderbed processes BJ MJ PBFEB Costs DED-processes DED wire PBFEB DED powder PBFL Costs Choice of technology is always a tradeoff between lot size per part, part performance and cost Industry requirements will further drive development of complimentary technologies for distinct areas within the cube Subsequent sintering Material Jetting Powder bed fusion by laser Thermal energy by laser selectively fuses regions of a powder bed Powder bed fusion by electron beam Thermal energy by electron beam fuses regions of a powder bed Directed energy deposition using powder Fusion of material in form of powder by melting during deposition Directed energy deposition using wire Fusion of material in form of wire by melting during deposition Material jetting Droplets of molten metal or metal powder in carrier liquid (to form green part) are selectively deposited Material extrusion Dispense of material through nozzle to form a green part which is then sintered Binder jetting Liquid bonding agent is selectively deposited to join powder material and form green part which is then sintered 17
AM has seen strong development in the recent past and achieved production readiness What's next (AMnx)? Emergence of Additive Manufacturing 2002 Arcam commercializes PBF by electron beam technology, launching first production model 1997 The "basic ILT 1) SLM patent" which describes metal PBF 2) by laser is filed 1996 Extrude Hone (now ExOne) becomes exclusive licensee of the binder jetting process for metal parts and tooling 2003 Trumpf introduces its first lines of metal PBF by laser machines (TrumaForm LF) 2005 MCP Tooling Technologies (later MTT Technologies Group) introduces PBF by laser machine SLM Realizer 100 2016 GE announces take over of Concept Laser 4) and Arcam; Oerlikon announces the acquisition of Citim 2017 DMG MORI presents PBF machine in cooperation with Realizer Today Series production readiness achieved; Up to 4 lasers simultaneously creating one part; Build area up to 800 mm in length; Automation concepts available 1985 Foundation of EOS by Dr. Langer and Dr. Steinbichler 1989 1990 Binder jetting process is developed at the Massachusetts Institute of Technology (MIT) 1993 1995 2000 2005 First metal PBF by laser machine is introduced by F&S Stereolithografietechnik (Fockele & Schwarze) 1999 Optomec delivers first commercial directed energy deposition (DED) System (LENS 3D Printer) 1998 2010 Today Next generation First AM-produced part for use in a jet engine by GE, receives FAA 3) approval 2015 First PBF 4-laser concept introduced by EOS 2013 FDA approval (510(k)) for the first patient specific cranial device by OPM granted 2013 First patent describing AM growth in medical, e.g. dentistry, is picking up traction fundamentals of PBF 2) by 2011 electron beam is filed 1993 EOS introduces EOSINT M 250 1995 ASTM approves first non-terminology AM standard 2011 1) Fraunhofer Institute for Laser Technology 2) Powder bed fusion 3) Federal Aviation Administration 4) Announcement of initial target company SLM Solutions in September Source: Company websites; European Patent Office; Wohlers Associates; Roland Berger 18
Our recognized study AMnx gives a comprehensive overview about different aspects of the metal AM industry "Additive Manufacturing next generation (AMnx)" our latest study > Next generation engineering > SCRUM engineering > AM software > Bionic design > Future seamless AM software 1) Engineering & software > Amorphous metals > Metalysis process > Multi-material parts Materials Chapter A. Chapter B. > Multi-laser concepts > Full powder-bed illumination > Hybrid applications > Electron Beam Melting > Automation concepts > Materialize Controller > Sand binder jetting > AM process control > Health risks in AM factories 1) Machines > MMP technology > Computer tomography in quality inspection Post processing > AM gas burner tip repair > AM for mobile repair 1) Services Chapter C. Chapter D. Chapter E. Chapters > AM cost model > Recent M&A activity 1) > AM market development > Stock market Impact F.-H. 1) (Partly) not included in published study Source: Roland Berger 19
A. Engineering & software Photo: FIT AG (cylinder head) 20
Combining the different software functionalities into a fully integrated CAD/CAM solution has become key for the large CAD providers AM software supplier landscape (non-exhaustive) Vendor key software product: Design Optimization Print file generation CAD FEA, CFD, MBD Topology optimization 1) Lattice structures.stl-file generation Support structures Slicing Laser beam orientation Machine control CAD Supplier A CAD Supplier B CAD Supplier C CAD Supplier D Simulation Specialist Simulation Specialist AM specialist Source: Roland Berger 21
For future applications a seamless software suite needs to cover the entire AM value chain including e.g. machining and documentation Seamless AM software suite schematic Seamless software integration Software Design Optimization Production planning Print file generation CNC programming Data management, process monitoring & documentation, CAQ etc., i.e. PLM functionality Hardware Printer controller Oven controller Machine controller 1 Machine controller 2 Machine controller 3 Machine controller 4 Production step CAD Optimization Production planning Additive Manufacturing Heat treatment Support structure removal Machining Surface treatment Quality control Equipment Printer Oven 5-axis CNC/ EDM 5-axis CNC e.g. MMP Test rig, CMM etc. Source: Roland Berger 22
Additive Industries addresses already the integration of several process steps in its modular machine concept Integration concept Controls MetalFAB1 Basic (3 modules) Exposure AM Core 1 AM Core 2 MetalFAB1 Productivity (6 modules) Heat Treatment Storage Exchange MetalFAB1 Max (11 modules) Modular scalable design allows for expansion of capacity, functionality and number of materials > Multiple (1-4) full field laser and optics positions preventing the need for stitching > Effective build volume: 420x420x400 mm³ > Strong reproducibility caused by robust thermal machine design and smart calibration strategies > Integrated post processing (heat treatment) increases process predictability and product quality > High productivity by continuous production (2 build chambers) > Instant switching between multiple materials gives a high flexibility > Automated handling by integrated robot, enclosure design and filter solution results in high operator safety > >112 h unmanned multi-job operation prevents multiple shift operations Source: Additive Industries; Roland Berger 23
B. Materials Photo: AIRBUS APWORKS GmbH 24
USP complexity Differentiated players can stay ahead by actively developing AM research fields such as material and machine technology AM material innovation landscape 1) (serial production) High Low "I4.0" powder life cycle mgmt. Improved process ability New materials ODS : Oxide dispersion strengthened alloys 1) Not exhaustive, based on expert estimates Source: Roland Berger; expert interviews Powder from oxides AM-tailored new materials like Scalmalloy Shape memory alloys Amorphous metals Grading of material properties Single crystal structure Improved process ability of Ni-based Superalloys like (M247, 909) or ODS-steels Improved process ability of TiAl/Mg <5 years Time horizon >10 years High-entropy alloys Ceramic like materials Superconductors PBF multi materials > Two major fields of AM technology development are currently discussed by the industry: Materials with new / improved functionalities like, e.g., amorphous metals, new super alloys for turbine hot section or even alloys of basic metals which allow for a better process ability like Titanium-Aluminides for aero turbine blades or Aluminum alloys with better weld ability like Scalmalloy Materials with improved process ability, e.g., printing with higher pre-heating temperatures for creation of directional microstructure for increased creep resistance > Powder management along the entire lifecycle with Industrie 4.0 technologies will further gain relevance 25
C. Machines Photo: Concept Laser 26
Current AM systems utilize multiple lasers to increase productivity and reduce manufacturing time Multi-laser concept The current state-of-the-art solution Principle Realization > AM production time depends on the layer-by-layer laser exposure time, lowering of the chamber platform and powderbed distribution time > Using multiple independent lasers, different areas can be manufactured in parallel with direct impact on exposure time E.g. dual-laser systems halve the exposure time leading to an overall productivity increase by a factor of 1.8 # of laser spots 4 3 2 1 Commercial systems available with up to 4 laser systems Time Image of the manufacturing chamber of SLM Solution's SLM 500 HL system capable of using 4 independent lasers and scanner systems simultaneously Result > A higher number of laser spots yields a direct increase in manufacturing speed > Nevertheless, multi-laser technology faces some problems, e.g.: The laser system is the system's most complex and expensive component Heat and fume creation scales with the number of laser spots and limits the manufacturing process > Limited advantage of multi-laser technology: scaling of the system with the most complex and expensive component fundamentally limits the method's cost advantage Source: SLM Solutions; Roland Berger 27
ILT's multi-spot system represents a conceptually new approach Direct advantages in process speed and system cost Multi-spot array concept Next generation technology Principle > A 5-spot laser array is mounted on a single printer-like processing head > 5 diode lasers are coupled to the processing head via an optical fiber system > The processing head moves over the powder bed similarly to a paper printer head > A local shielding gas and fume removal system is mounted directly on the processing head > Melt pool control is achieved by laser intensity modulation while the processing head moves over the powder bed (see figure below) Shape of final part Laser ON Laser OFF Conceptual illustration of ILT's novel multi-spot array PBF concept Realization Result Picture of the enclosed ready-to-use PBF multi-spot system > Good scalability in terms of manufacturing speed and chamber size: Increased manufacturing speed due to a wider area of optical illumination Chamber size is not limited by the optical system Local shielding gas and fume removal system for ideal processing conditions independent of chamber size > Reduced system cost due to a low-complexity optical system View of the processing head: a fivespot array is mounted on a single scanning head System currently in research stage, part quality to be evaluated potential drawbacks vs. beam-steering approach for small structures Source: Fraunhofer Institute for Laser Technology (ILT); Roland Berger 28
Health risks from AM are not yet sufficiently well understood, especially with regards to the handling of metal powders Health risks in AM factories (non-exhaustive) Health risks from Additive Manufacturing 1 2 3 4 Danger to eyes and body from AM machine laser system Fire & explosion hazard from metal powders Risk of chemical reactions from metal powders Danger of slipping e.g. due to scattered metal powders AM system Source: Roland Berger 1 2 #1 #2 #3 #4 #5 3 5 6 #6 #7 #8 #9 #10 Ancillary system 4 7 5 6 7 8 Unloading Powder sieving station Exhaust air system 2 3 5 6 Filter Platform preparation New powder 8 New powder Risk of metal toxicity via powder inhalation, eye or skin contact Risk of serious eye irritation & damage from metal powders Suffocation risk from oxygen displacement by inert gases Deposition of metal powders in filter systems and piping > Health risks stemming from the AM machine including laser system, inert gases and metal powder Risks from metal powders require further examination > No guidelines available for powder handling in industrial environments of 3D printing > No studies on health impact from AM metal powders available > Several initiatives launched in Germany to evaluate health impact of AM: Institut für Arbeitsschutz der DGUV (IFA): "Gefahrstoffemissionen aus 3D-Druckern" (until end of 2018) Bundesanstalt für Arbeitsschutz und Arbeitsmedizin (BAuA): Project "3D Printer" (until 05/2017) Verein Deutscher Ingenieure (VDI): Commision 105.6 "Safety during operation of AM machines" 29
E. Services Photo: Siemens 30
"Mobile" applications of AM on large container ships, aircraft carriers or for military vehicle repair are gaining more and more relevance Example AM for mobile repair services Container vessel triple E class Initial situation 3D printed tools and fighter plane nose Example: Containerized print center for ground forces USS Essex > Maersk ship line is investigating the use of printers on their merchant vessel fleet > The US Navy has installed first printers on the combat ships like the aircraft carrier USS Essex > Mobile print centers in containers for the ground troops are under investigation by several armies > First real application show relatively robust FDM printers, which are used by the maintenance staff for printing of assembly tools, bending tools or relatively simple plastic replacement parts > The use of metal printing in mobile applications is more difficult due to the sensitivity against vibrations. FDM printer, mostly used, are more robust Source: Roland Berger 31
European defense organizations are also preparing for mobile AM solutions First project tender published Project target of a European tender for a containerized AM solution > Identify opportunities and weaknesses for AM in the European defense sector > Highlight elements delaying or preventing European defense forces from using AM technology > Demonstrate the feasibility and operational utility of a containerized AM solution during an air-born maneuver > Raise the military awareness of AM and its potential in defense > Exemplify how AM could change todays ways of operations, logistic support or maintenance of platforms > Discuss the possible economic impact on defense capability Source: Call for Tenders; Roland Berger 32
Fleet operators, OEMs, Tier Xs and PLM providers need to set up a completely new infrastructure for efficient fleet data management Data management challenges OEM Tier 1 Engine Tier 2 Waterpump Tier 3 Pumpwheel Financial aspects, e.g. reimbursement, license agreements, etc. Legal aspects, e.g. IP, warranty, copyright, patents, CE, etc. PLM system Data management, e.g. CAD data, 3D models, specification, material data, etc. Production, e.g. production drawings, process descriptions, test specification, etc. Source: Roland Berger 33
H. Stock market 34
In 2016 and 17, M&A activity pace has picked up within the metal AM world GE's Concept Laser and Arcam deals with highest volumes Mergers & Acquisitions related to metal-am (non-exhaustive) February 2014 Arcam acquired powder producer AP&C (EUR 14 m) and Autodesk acquired Delcam (EUR 189 m) April 2014 Trumpf and Sisma Joint Venture and acquisition of SpaceClaim by ANSYS (EUR 64 m) May 2014 Autodesk acquired Within Technologies (EUR 65 m) September 2014 3D Systems acquired Layerwise (EUR 32 m) and Arcam acquired med-tech contract manufacturer DiSanto January 17 DMG MORI presents PBF machine in cooperation with Realizer December 2016 Oerlikon acquired design and production service provider Citim August 2016 Siemens acquired service provider Material Solutions July 2016 HP Products acquired 3D-scanning companies David Vision Systems and David 3D Solutions 2013 2014 2015 Jan Feb Mar Apr May Jun 2016 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 2017 3D Systems acquired software supplier Geomagic (EUR 41 m) January 2013 Stratasys acquired Makerbot (EUR 303 m) May 2013 3D Systems acquired Phenix (EUR 17 m) June 2013 3D Systems acquired CAD/CAM software provider Cimatron (EUR 88 m) February 2015 H.C. Starck GmbH acquired powder producer Metasphere and Global Tungsten & Powders acquired Finnish powder producer Tikomet June 2015 Autodesk acquired netfabb (EUR 38 m) November 2015 LDR Holding Corporation made a minority investment in Poly-Shape Januar 2016 Heraeus and Exmet form partnership to foster development of amorphous metals June 2016 GE acquired 75% stake in German SLM printer manufacturer Concept Laser for EUR 551 m October 2016 GE acquired 76% stake in Swedish EBM specialist Arcam for 596 EUR m Arconic launched as standalone company from Alcoa November 2016 April 17 Premium AERO- TEC, EOS and Daimler cooperate in NextGenAM project to study AM factory automation Source: Mergermarkets; Company information; Roland Berger 35
The first printed gun and the ensuing stock rally led to a media hype about Additive Manufacturing in 2013 and 2014 Key events in 3D printing Google searches for "3D printing" 1) 100 50 First major announcement of Additive Manufacturing > GE starts industrial use of AM for its jet engines 0 Stock of Arcam AB [USD] Biggest hype 50 > 1st 3D printed gun is unveiled (May 3, 2013) 25 > News media all around the world start covering 0 the 3D printing industry Stock of Voxeljet AG [USD] 100 50 0 Stock of 3D Systems, Inc. [USD] 100 50 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 Highest stock valuation > IPO of the small German 3D printing company Voxeljet AG > Stock prices reach all-time high after five-month rally 1) Highest search volume = 100 points Source: Bloomberg; Google Trends; Roland Berger 36
Although stock prices of established AM companies declined over the last years, analyst grades indicate hold or buy positions Stock prices [USD] 150 150 136.46 150 150 150 96.42 100 50 13.29 0 2013 2014 2015 2016 2017 100 50 16.54 0 2013 2014 2015 2016 2017 100 50 46.60 35,00 0 2013 2014 2015 2016 2017 100 65.55 50 2.8 0 2013 2014 2015 2016 2017 100 48.56 50 34.27 0 2013 2014 2015 2016 2017 > IPO: 1989 > Focus on PBF (plastic) > Daily trading volume since 2015 stabilizing at approx. 3.1 m stocks > 3D Systems is the AM pioneer first system sold in 1988 > 52 acquisitions since 2009; cumulative acquisitions in 2014 total USD 345 m > IPO: 1994 > Focus on material extrusion > Daily trading volume approx. 1.3 m > Acquisition of MakerBot (2013) several service providers (2014) and RTC Rapid Tech (2015) > New technology enables jetting of three different base materials > IPO: 2000 > GE acquired 76% of Arcam in 11/2016 > Focus on PBF by electron beam (inventor of the technology) > Daily trading volume approx. 128 k stocks > Expanded into powder materials and services > 2 acquisitions in 2014 for USD 47 m Bloomberg analyst grades distribution 2016-2017: Buy Hold Sell > IPO: 2013 > Focus on binder jetting > Daily trading volume approx. 1.8 k stocks, tending upwards > Developed new phenolic binder in 2014 enabling higher resolution, precision and powder recyclability rate > Opened new service facility in the US in 2015 > IPO: 2014 > GE bid on SLM in 09/2016 Stopped after Elliott stepped in > Focus on PBF by laser (metal) > Daily trading volume approx. 51 k stocks, tending upwards > Versatile systems due to open architecture most metal powders applicable Source: Bloomberg; Broker Reports; Nasdaq; Yahoo Finance; Roland Berger 37
Overvalued AM stocks are approaching fair valuation Stock profits are likely to be appropriate and stable in the medium term Price/earnings ratios of listed AM suppliers 300 Indicative 250 200 150 AM companies Reference Speculative bubble (>30) Overvalued (21-30) Fair valued (11-20) Undervalued (0-10) 1) P/E ratio at year end Source: Bloomberg; Capital IQ; Nasdaq; Roland Berger 100 50 0 2012 1) 2013 2014 2015 2016 2017e 2018e 2019e 38
Please contact us if you have any further questions Dr. Bernhard Langefeld Partner Engineered Products/High Tech OpernTurm, Bockenheimer Landstraße 2-8 D-60306 Frankfurt Tel.: +49 160 744 6143 Mail: bernhard.langefeld@rolandberger.com Source: Roland Berger 39
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