UBS On The Importance Of 3D Printing

Tyler Durden's picture

Over a year ago we discussed the "next Industrial Revolution" and where it might appear from. 3D printers were envisioned among Goldman's top disruptive themes earlier this year and as UBS notes, 3D printing – or additive manufacturing – has been catching investors’ imaginations in recent months. Some commentators have suggested the technology has the potential to literally transform the world economy and dismantle global supply chains; while UBS points out that, others have suggested the technology is hyped and has little promise beyond a few niche product areas in manufacturing. The truth, Andrew Cates believes, probably lies somewhere in between but he is nevertheless more sympathetic to those who champion the technology’s disruptive – even revolutionary - qualities.

 

Via UBS' Andrew Cates,

For those readers who are not yet aficionados on this technology we start with a brief explanation. Additive manufacturing (AM) techniques (a.k.a. 3D printing) create 3D objects directly from a computer model by depositing material where required and by building products up layer by layer using a range of different materials (e.g. polymers, ceramics, glass and even metals).

This stands in contrast to conventional subtractive manufacturing techniques which involve taking blocks of material, cutting them down into the right shape, and assembling them into more complex products. The technology is admittedly still in its infancy and it suffers from a range of limitations at present. However, we think the optimists who argue that this technology will be revolutionary have a strong case. As one author has quipped:

“This is not the third (industrial revolution), nor the second, but rather the first real revolution in how we make things since a pre-historic man picked up two rocks and started banging them against one another, trying to shape them into something useful” (Dr Alexander Elder)

The technology has not yet generated a major impact on the world economy. A recent report from UBS analysts, for example, noted that the AM market (USD 2.2 billion) amounted to just 0.02% of the global manufacturing sector. Still, as the analysts equally noted, the technology is starting to spread more broadly both at a sector-specific and at a country-specific level. A recent report from Wohlers Associates, for example, reveals that AM is now used in a number of different economic sectors with consumer products/electronics the leading industrial area. The motor vehicle and aerospace sectors are also keen users while the medical/dental profession has additionally established itself as a strong sector for AM over the last few years (see chart 1 below).

The technology is - at present - particularly advantageous in low-to-moderate volume markets (e.g. aerospace) that regularly operate without economies of scale.

At a country-specific level the data from that same report from Wohlers reveals that the US is the lead user by a large margin. Japan, Germany and China have the second, third and fourth largest installed bases, respectively, of systems worldwide (see chart 2 below).

There are a number of reasons why the technology has not yet had a bigger impact. Challenges include production speed, materials availability, precision and control. Issues concerning legal responsibility are also problematic. Still, as we explore below, incentives to overcome these challenges clearly exist because of the potential advantages that the technology affords. And matters at present may already be moving more rapidly than many of the pessimists might contend. The use of nanotechnology, for instance, could mean that plastics in 3D printing soon rival the strength of metals in more conventional manufacturing.

Meanwhile the printing of human kidneys, of houses, of hamburgers (and other food products) and even – in the distant future - of an aeroplane are being actively researched and in some of those cases (e.g. houses and hamburgers) even printed.

The reasons why the technology has so much potential are as follows:

It lowers energy intensity by saving energy, by eliminating production steps, by enabling the reuse of by-products by producing lighter products and by cutting the need for transportation. It is in these respects obviously environmentally-friendly as well.

 

AM techniques yield less waste. The US Department of Energy estimates that by building objects layer by layer instead of traditional machining processes that cut away material AM processes could reduce material needs and costs by up to 90%.

 

It heightens incentives to innovate by eliminating traditional design restrictions. It makes it possible, for example, to create items previously considered too intricate and accelerates final product design. The ability to improve performance and functionality – literally customizing products to meet individual customer needs – should open new markets and improve profitability.

 

It yields greater flexibility in the production process by enabling rapid response to markets and new production options outside of the manufacturing factory. Spare parts can be produced on demand, for example, reducing the need for inventory and complex supply chains.

In short the technology enriches the capital base and enhances the scope for an economy to achieve faster capital- and total factor productivity growth. Its disruptive qualities emerge from the ongoing fall in its relative costs and the increasingly broad reach of its potential. Arguably of most significance from the vantage point of potential global economic benefits the technology lowers the barriers to entry in manufacturing and allows almost anyone to become an entrepreneur.

As we have explored in more detailed research in recent weeks there are a large number of technologies that are rising to the surface of the world economy at present which offer a great deal of promise. AM in isolation would arguably not be so potent were it not for these other innovations that are acting alongside it. The marriage of nanotechnology and AM techniques is perhaps the bestillustration of this. But the increasingly connected world economy via the increasing use of mobile and cloud technology and the ease with which digital designs can now be transported around the planet are notably also helping to foster the take-up and deployment of AM techniques.

We have tentatively estimated that the efficient deployment of new technologies in the information and communications sector, in manufacturing (including AM) and in energy could lift the potential growth rate of the world economy by as much as 0.5 percentage points in the coming years. The winners from this potential transformation, however, are more likely to be those economies, sectors, companies and consumers that are active users of these new technologies and not necessarily its active producers.

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LetThemEatRand's picture

This is what happens when reality ceases to matter.  It is also an example of what is wrong with supply side.  Let's say you can print a Kidney but no one has a job.  Cool for the few hundred people with kidney printers, I guess.

acetinker's picture

Hey Rand, I'm actually glad to hear this topic discussed seriously on The Hedge.  I am in the subtractive biz, and for right now, that side of component manufacturing is still firmly in charge.  I do consider, however, that my job is quite literally to make useless chips out of perfectly good solid objects.

I've been watching this space, and so far, it is more a novelty than a practical application.  Maybe it's a wet dream, or maybe it will be as revolutionary as the transition of skilled mechanics controlling balky machines, to technicians programming slick, fast CNC's.

Time will tell.

DoChenRollingBearing's picture

Don't worry LTER and acetinker!  They will make 3D Printing illegal when they can make decent (not plastic POS) guns...

LetThemEatRand's picture

Legal for people with the money to afford it.  FEMA for the rest of us.

Harbanger's picture

"us"?  FEMA for you and all the other hopeful Obamabots, not so much for the rest.

CH1's picture

3D printers are cheap and getting cheaper!

Dantzler's picture

Gotta throw this out there up-thread. CH1 I appreciate your contributions here.

Long time incognito member, but proud enough to post of a fellow WA state inventor who has reduced the cost of the input material.

Info here:

http://techland.time.com/2013/03/04/how-an-83-year-old-inventor-beat-the...

 

Acet's picture

Once in a while I discover some old gueezer who turns out to have a ton of life experience, an amazing pile of expertise and/or huge wisdom.

It's unbelievable how our societies usually waste these people.

 

That said the majority of the older people are just as lightweight, shallow and unimpressive as the majority of people in general.

 

Ranger4564's picture

People, please think in a much bigger framework.  Many of you chain yourself to a job, believing that if you're free, you're floating in space ready to die. That's absurd.

Look, instead of looking at every human act as a personal choice, just for once look at it as a law of nature. Just for a few minutes, hours, days, try not to think in terms of individual choice but rather species level events. If you set aside the presumed motivators for a bit, you can possibly see the broader trajectory. What I mean is, it doesn't literally matter why someone invented the plow, the wheel, the cotton gin, the steam boat, for this particular mental exercise, it only matters that someone, anyone, bothered to go from a lesser technological position and chose to create a more advanced technological position. And I want you to also set aside what you believe were their motives, especially in terms of economic benefit or self interest. I am not denying it, I'm just saying focusing on that clouds one's vision and prevents awareness of the larger trajectory. So it doesn't matter that the merchant wanted a better way to transport goods, or that the farmer wanted a better way to plow, or that the miller wanted a better way to pick and refine cotton, or that people wanted a better way to transport large numbers of objects / people all for their own economic benefit / personal survival. It's understood and acknowledged.

When you set aside the conditions for a minute, you recognize that humanity has been on a perpetual trajectory of reducing Risk, increasing Productivity, and increasing Prosperity, it's an imperative. Given the technological situation as it was (until recently), there was an injunction imposed by society... work or die. You either participated in the reduction of risk, increase in productivity and prosperity, or you were a burden. And so, we developed the ethics / morality / social obligations - the work ethic and distaste for the less energetic. But these conditions are mutable, not fixed, and these are always in transition. So once the plow was invented, many people were displaced from farming, and ended up specializing in other interests, some of which the people here ridicule needlessly. So once the plow was replaced by the Combine, many more people were displaced from farming, and many ended up being day traders, the kind of people I ridicule needlessly. ;-)  Point is, every single technological tool we invented improved the conditions for survival and prosperity and freed more and more people to pursue other tasks. But because we didn't refine our do or die injunction, people found really stupid ways to justify their participation in productivity. And before anyone thinks they are deserving while others should be dead, I will remind all of you that very few here could invent their own lives, and very few here could actually create their own technological prosperity. Sure you might survive, but prosper, maybe not. Not everyone can invent a wheel, or a plow, or a steam engine. So humility is in order.

If we can acknowledge that technological progress has been generally reducing Risk and increasing prosperity, we can move to the idea that perhaps a technology exists or could be created that would fundamentally shift our social obligation to work or die... what happens when computers replace 10's of thousands of people in all sorts of areas of production... think of how much bread, and food in general is producted by technological automation. Think of it as the opportunity to redefine our social contract, instead of a threat to your prosperity. The fact is, we don't have to vegitate if we stop working 40 hours a week. We don't have to stop being intelligent or active simply because we don't act as scoundrels or obstacles to the efficiencies that are technologically and socially possible. We don't have to be accountants, insurance brokers, real estate brokers, bankers, traders, muddling middle men all of them. We don't need to be the squeaky wheel just to be lubed. The current social contract is so dead, it's a fucking tragedy. The current economic situation is the proof. A few people across the globe decided to be the muddling middle men in every transaction you engage in, and they're extracting almost all of the value from the transaction. This because their vision of prosperity is dated and flawed, and so are their ethics.  What if we didn't act as obstacles but instead acted as facilitators / enablers, to enhance productivity, so we could increase prosperity? That's the opportunity, not the risk.

We are on the precipice of a humongous change in civilization, if we take control of the situation... or we could continue to bicker about what role we have left in the now dead paradigm. Having free time, free from the obligation to work for livelihood, does not mean people become useless. The entire purpose of the enlightenment was to remind us that we have much more learning to do, much more to explore, much more to express. And with more time, less restrictions, think of what Copernicus / Galileo / Da Vinci / Michelangelo / etc could have achieved. If there wasn't the pressure from the powers that be to produce only acceptable results, then we might be talking about a very different set of ideas.  Point is, we could free ourselves from intellectual limitations and social obligations that are dated, if we acknowledged that it's time to redefine our social contract. If we all worked 10 or 15 hours a week to advance our technological world to ensure efficient production, we could enjoy the prosperity we've achieved.

So you're wondering where is all this prosperity I keep speaking of? It's the trillions of dollars the Oligarchs have been confiscating throughout history. If we take the prosperity they extract and use it to support civilization, we'd actually increase prosperity significantly for the majority of humanity.  At the same time, it would free you to pursue the intellectual and other personal pursuits you would choose to pursue. Now I will acknowledge that a lot of present day adults have not had a good education, have not evolved, so might not be able to find a way to occupy their time in fruitful activities. That is actually a result of forcing people to live with the work or die model, where we eliminate creativity, reinforce obedience, and require compliance. If we change the way we educate our children, we can improve their conditions to be able to lead more fulfilling lives.

So how does this tie into this technology? This technology will change the way we think of Matter, how we think of fabrication, production, the kinds of things we can fabricate, change maintenance, change everything. Literally, we are on the verge of so much opportunity, but you have to stop living in the past. With advancement in the implementation of this technology, roads can be continously repaired, rail tracks also, bridges could be built, aircraft could be assembled, buildings could be built that provide housing / research laboratories / facilities for exploration, whatever. The limit is your imagination. This technology will create a book instead of having it printed and shipped to you. It will eventually assembl food and new materials, new forms, new devices. It will recycle old objects. It will do everything, including make you a new set of clothes.

That is, if we cooperate and choose to continue to reduce risk, increase productivity, increase prosperity. If instead, we choose to be small minded and destroy this technology, out of fear of being displaced from work, then we're just killing people needlessly. Nothing says you can't make things by hand even now. Nothing will prevent you from doing so in the future.  it's just that 7 billion people will not be relying on someone to plow the field. The Combine will gather the food, the milling machines will mill the grain, the baking machines will bake. We will be there to monitor progress, not impede it. Work with me here.

Mike in GA's picture

Think you could distill your utopian thesis down to say, 1 paragraph, maybe?  Other than that, it's got real promise.  Now exhale, put the bong down and get away from that ledge.  Work with me here.

Ranger4564's picture

I know I know. I agree actualy. Go read some of my other posts on ZH, you'll encounter various forms of the distilled version. I end up elaborating and belaboring because so many can't seem to piece it together if I summarize. Here.

We have the opportunity to utilize technology to provide for our human needs, to liberate people from meaningless labor, and to redefine our social contract, if we want to.

 

Jean Valjean's picture

You are actually on to something and I felt it was worth reading your rant.  That said, I have two tangents for you to persue after your next bong hit...

One.  The persuit of risk reduction is actually the bain of mankinds existence throughout history.  I'll admit, risk is reduced through the increase and application of technology, however, increasing and applying technology is a risky endevor.  It's a paradox.  Those that consider themselves in the risk reduction business; governments, bankers, insurance salesmen, day traders, are the very dirt in the gearbox.  As individuals, the inventors and technologists, are risk takers.

Two.  Another way to describe your above rant is a description of "God's Plan".  God want's us to trust him for our day to day survival and take risks to improve things.  When we are doing that, we are on the correct side of history, when we lose our faith, and begin to impede others in order to make a living, we are on the wrong side of history.

MeelionDollerBogus's picture

Or, we could film the most epic 3 hour feature film version of Ow my Ballz ever seen by mankind.
FEATURING star cameo appearance by Chuck Norris. Or was that Steven Seagal as featured in Cockpuncher(tm)?

acetinker's picture

Is this your whole sticking point, Rand?  Somebody says Obamabot and you become sanctimonious?  Maybe you shoulda read The Fountainhead, before skimming the cliff's notes version of Atlas Shrugged.  

 

Freddie's picture

Can we 3-D print a new president, Congress and Supreme Court?  I am sick of being a balance sheet liability for USSA Inc. - a red shield corporation.

Caviar Emptor's picture

Here's the conundrum : someone will print a 3-D printer that will in turn print more which each print more....until nearly everyone has one.

The Big Ching-aso's picture

I think it has real-world application for the lost wax method of casting metal parts and such.   But in the end of the day it's a modeler for hard metal cutting machines to still do good old latheing and milling holding tolerances.

For plastic parts yeah sure I can see this working out ok.   But it's not gonna replace a Bridgeport or Hardinge.   Ever.   Unless someone devises a $200 shoe-box-mass-market-uber-laser 3D printer that runs off 110v and is also able to safely spue and shape out molten metals in the process. 

In the time being I'd rather have a mini EDM anyday though if one wanted to play inkjet printer on steroids.   

acetinker's picture

Yep, that's exactly the things I heard a long time ago.  "A monkey can run a NC machine", etc.  I kinda doubt a monkey could, or even want, to run a machine, but that's not the point, is it?

Those hard line manual machinists became machine tenders, and eventually became obsolete.  They didn't make the transition.  They should have been asking "how do you program these things?", but they chose to remain willfully ignorant.

Maybe it's just me, but new ideas are not to be feared.  You're right that 3D printing is crude just now, but so was NC when we had to load Friden flex-o-writer cards in an optical sorter/reader in just the right order.

Yeah, those systems fucked up a bunch of perfectly good material.  The cards would jam, and most of the programs back then were written in relative positioning, so the machine would just keep repeating the same move, relative to the last position, to the point of machine/tool meltdown.

3D priniting may, or may not be revolutionary.  The real question is; Will YOU make the transition?

The Big Ching-aso's picture

Well to me whatever 3D evolves into it's still basically a form of mini-NC machine.   And if you start talking parts size relevance it's still gonna have to be as big and rigid as a Bridgeport to produce a big and rigid part.    Think that 7 ft 3D sucker will sell like hotcakes at your friendly Costco?     You also know as well as I that parts setup can be a real bitch especially if you're adding for example a threaded new hole here or there.     So what are they thinking here?  It also sets up a jig for you automatically too?  How about a hand that comes out and unzips?

Look I think this could be niche revolutionary for not highly stressed small part designer/producers.  Plastic parts yeah out the wazoo I can see that coming, along with lost-wax things.      Everything else high stressed it's still gonna require some hard-ass alloy that can be chipped out with even harder-ass tooling.   Unless of course they come up with some alien-level nano epoxy like substance that hardens to Rockwell 60 while still maintaining tolerance.      I fathom though that where this will make some people richer are machining or lost-wax shops that can take the 3D produced model and replicate ala CNC machine.    So these shops take your plasticky 3D part and turn it into whatever their CNC mill, lathe or lost-wax can transform into industrial grade tough parts.   Everybody wins but it still takes money to get there.       Like you said though, it's probably not a bad thing to learn about if you're a typical NC machinist today.

Bottomline I equate this technology to what we would like to see happen some day through our whimsical imagination looking at a typical inkjet printer but unfortunately the technology today to get 'er done is still a long ways off.    I'm thinking sorta close to Star Trek days maybe.    But today this still ain't the equivalent revolutionary advent of the toaster oven IMO.  It's still too niche-ish. 

 

 

 

Oracle 911's picture

Well there is a technology which  combine 3D printing and electrolysis, the (Czech) inventor died before he could commercializate it (it was about 10 years ago). So it allows make really complicated parts of machine from hard alloy or from alloys with low melting point useful to lost-wax method.

MeelionDollerBogus's picture

"Unless of course they come up with some alien-level nano epoxy"
Like what's naturally produced from zebra mussels?

" It's still too niche-ish. "
As long as it's not too Neitzche.

acetinker's picture

Man, where is Michael, aka DeweyCheatumHowe, when you need him?  ...big and rigid as a Bridgeport... tells me a lot.  When it comes to machining, you don't know your ass from a hole in the ground.

I was just qualifying blanks on my Bridgeport knockoff this afternoon, but the Haas they go to next is an absolute monster in MRR (metal removal rate) in comparison.

So, you think I'm a asshole?  Naw, ching.  I'd love to show you how this shit actually works.

I don't care much for your condescension, either.  "Not a bad thing to learn if you're a typical NC machinist"?  What is "typical" exactly?

If you call my shop to get a quote, you get me.  If you call and ask for A/P, A/R, you get me.  If you call and ask for the person in charge of..., you get me.  If you need a piece of machinery to do a specific task, you get me.

When the bathroom gets disgusting and you call janitorial, you get me.  If something is broken, or not working properly, you get me.

But the most important thing is and will continue to be, when something mechatronic is fucked-up, you call, and you get, me.

So, your flippant dismissal of 3D printing is not only short-sighted, but indicative of your total lack of regard for the people who make your world work.

Bagbalm's picture

The management had a lot of say in who went to NC machines. I trained myself on programing them from the manuals. So when I asked to move over the owner gave me a part print and asked me to write a sample program.

He rejected my program and refused to try running it because it used shortcuts such as a pecking command to drill a deep hole. He and the three men he'd trained called out every move making the program about three times as long as necessary, because as he said "I can't see what it is going to do that way." In other words he was too stupid to do it right.

I went to a different company where the owner wasn't afraid to hire anyone smarter than him, and the old boss had a mental breakdown and lost his business.

If you think you just decide to advance yourself in most of these businesses you are discounting politics and stupidity.

acetinker's picture

I know.  So, instead of asking of asking someone else to employ your self-evident ass, show the whole world how brilliant you are.  Got ballz?

Desert Cat's picture

I keep envisioning these things as sand casting prototype generators.

MeelionDollerBogus's picture

Well if we're gonna carry it that far why not reprogram living cells that build things while reproducing?
Sure, maybe some things won't be "durable" like steel girders but who knows? Living things grow bone & some of those living things are very durable.
Hit a moose with a car. Tell me who's hurt more in the end, moose or car.

acetinker's picture

Money to afford it... Dude, I am in more debt than I've ever been in my life, and I did it so I could support ignorant and ungrateful sumbitches like you.  No more.

I will do what pleases me, the rest of you can fuck off.

 

 

Carl Popper's picture

You are legally allowed to build your own weapons including ar 15 rifles. No license or permission required. You do not even have to put a serial number on it. Many people do it and have build parties in the USA. Check out Aries Armor

Running On Bingo Fuel's picture

I mentioned that a while ago. I said it would make a good xmas gift for your kid to buy a kit from cheaperthandirt and spend some time teaching them gunsmithing.

Oh boy did everyone get bent. The ankle biters came out in force.

Over.

Thisson's picture

All Ares Armor Build Party Slots have been closed per cease and desist letter from the BATFE.

http://aresarmor.com/store/Category/BuildParty

CH1's picture

They will make 3D Printing illegal

Shit, what isn't illegal these days?

I am sure they'll try, but they certainly haven't done especially well outlawing pot. :)

thisandthat's picture

Since when you need a 3d printer to make guns?

Nassim's picture

I never quite understood why it was such a big deal to make a plastic gun that can fire - badly - once. People have been making proper guns by hand for centuries.

http://en.wikipedia.org/wiki/James_Purdey_and_Sons

exi1ed0ne's picture

Think metal detectors, real guns that are disguised as toys, etc.  Plus the tech to print them in plastic is far more accessible with no special kit needed.  You can build all the parts out of common materials.

http://reprap.org

twh99's picture

Defining today's manufacturing technology is an overly simplistic breakdown of today's technology. 

I can think of at least three things off the top of my head that do not fit the author's definition: welding, molding and metal stamping.

3D printing is a cool technology, but like all the others it has its place.  But it will not replace the other technologies that currently exist.

I remember years ago when all the rage was CAM (computer aided manufacturing).  You had engineers swearing that soon everything would be made this way and all other manufacturing methods would be obsolete.  Not true! Although it does have its place it only is one piece of the production puzzle.

The same for 3D printing.  It will become a tool to be used alongside all the other tools.

MeelionDollerBogus's picture

I'm not sure I can remember when is the last time I touched a thing not made with CAD/CAM.
Maybe... the steel cutlery in the kitchen? Possibly even a wood chair but I'm not sure I should bet on that.
CARPET. There. I had to really sit & think of it but carpet, bed sheets, pillow cases. There. i did it.

disabledvet's picture

interesting post and thanx for it. the revolution of course is in the materials space...and yeah, it's blown away everybody this year (just look at the materials space en toto.) http://en.wikipedia.org/wiki/Zoltek "very not bad" as the Chinese would say. Actually...it was Japan: http://www.bizjournals.com/stlouis/blog/BizNext/2013/09/report-zoltek-bo... http://en.wikipedia.org/wiki/Toray_Industries got kind of a "Samurai" thing going with the roof line it would appear. in any case...lose a million bucks...get bought for half a billion. sounds like a good deal. i imagine dupont is still pretty angry oh these many years though. everyone laughed at the all electric BMW i-3 but that thing was made totally out of carbon composite. http://www.bmw-mail.com/ics/bmwics_article.php?pid=116&language=en very light weight although it sure got a lot of bad press when they launched the vehicle. "not serious" did stand out as a comment. Nissan has a five year head start on everybody right now insofar as the entry level market is concerned.

ACP's picture

There's an easy solution to that, which is crowdfunding.

Anyway, the naysayers remind me of IBM when they thought they had Bill Gates by the balls by buying the software for their hardware. The real money was always in the software. There's going to be a little known facet of this technology that will be the real moneymaker.

LetThemEatRand's picture

So the iPhone is going to make me rich and not have to work as much, then?

Carl Popper's picture

You? Proly not. Lol. It would require hard work and a willingness to risk.

Me? Maybe!

acetinker's picture

No, Rand.  Just as CNC's have made many of my cohorts from 3 decades ago obsolete, so too will some new technology make ALL humans who refuse to adapt, obsolete.  You may think that harsh.  You may think me cold, cruel  even.

I am far from an elitist, but I recognize that civilization, going forward, needs far less humans.

LetThemEatRand's picture

Hey, Bill.  Windows 8 sucks, by the by.