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Failed Mergers and "Laser Wars" Take Centre Stage Amid Regional Variations in 3D Printer Shipments
East-West "Laser Wars" in the Industrial metal powder bed fusion 3D printer market signal accelerated revenue growth ahead
London, 12th October 2023 - The second quarter of 2023 saw contrasting patterns in the shipments of Industrial* 3D printers, according to latest insights by global market intelligence firm CONTEXT. Eastern vendors saw strong year-on-year (YoY) growth, especially in shipments within China, while many Western vendors faced continuing reduction of capital expenditure in key end markets with many distracted by mergers and acquisitions.
"Discussions between the likes of Stratasys, 3D Systems, Desktop Metal and Nano Dimension have so far failed to produce the world's first $1B 3D printing company but efforts to that end have not yet been abandoned", said Chris Connery, head of global analysis at CONTEXT. Although shipments of new Industrial systems were generally weak for the quarter (up just 2% YoY), and those of Professional printers down YoY for the fifth consecutive quarter, they were better than expected in Midrange, Personal and Kit&Hobby price-classes (up 7%, 12% and 3% respectively.) In general, new 3D printer shipment growth across the globe was limited in the period with the latest full-year forecast showing single-digit unit shipment growth in 2023.
INDUSTRIAL SYSTEMS
Industrial 3D printer shipments were also regionally segmented: China-based vendors met most of the demand in that country while Western vendors fulfilled orders in the US and Europe and the rest of the western world. With 38% of Industrial printers shipped in Q2 2023 going to China, it was again the world's largest market - followed by North America (29%) and Western Europe (23%).
In Industrial polymers, growth in the quarter was driven largely by shipments in domestic China. Regional Covid lockdowns in Shanghai just a year ago have led to uneven growth of domestic shipments in China over the last year but, in the second quarter of 2023, unit sales of Industrial polymer machines (particularly from vat photopolymerization products from leading vendor UnionTech) were up 66% against a -15% fall in those from Western vendors.
On the metal side of the Industrial 3D Printing market, market activity remained focused on powder bed fusion with 74% of all Industrial metal systems shipped in the period being of this type. In this category, Western vendor shipments dropped -12% YoY while shipments from Chinese vendors were up 1%. Manufacturers have recently been focusing less on how many machines they sell than on supplying larger, more efficient and more expensive models.
So, although the number of metal powder bed fusion systems shipped by Western vendors was down -5% YoY in H1 2023, revenues from these sales increased by 21%. The trend toward higher efficiency machines - often characterised by use of a larger number of lasers - largely began in the West thanks to companies like Nikon SLM Solutions and Velo3D. Major Chinese players, including BLT (Xi'an Bright Laser), Farsoon, Eplus3D and HBD, have now joined the "laser wars" and are showcasing larger build models with 16, 20 and even 26 lasers. As these new, more efficient machines begin to ship in that region, expectations are that, here too, revenues will increase even if unit shipments drop.
Chart 1: Industrial 3D printer system shipments by material or/and type and vendor HQ location
MIDRANGE SYSTEMS
Shipments of Midrange* printers rose 7% YoY in Q2 2023 and were 2% up on the previous quarter. This is largely down to sales of a sub-class of low-end polymer powder bed fusion machine (most of which come from Formlabs) and rising domestic shipments of vat photopolymerization printers in China (almost exclusively by UnionTech): if UnionTech and Formlabs are excluded from the analysis, then Midrange unit shipments were down -17% YoY. Although Shanghai-based UnionTech benefitted from a weak compare to a Covid-impacted Q2 2022, accelerated sales of its latest line of mid-priced systems have also contributed to recent growth. Formlabs current success springs from essentially creating a new category but shipments of these machines are now beginning to plateau.
PROFESSIONAL SYSTEMS
The Professional* price class continued to struggle as unit shipments dropped -30% YoY in Q2 2023, having seen a similarly precipitous fall in the previous quarter. Systems utilising both leading processes were affected: FDM/FFF printer shipments were down -36% while those of SLA printers fell -30%. Market leaders UltiMaker BV (owner of brands Ultimaker and MakerBot) and Formlabs both saw steep YoY declines in unit shipments of products in this class.
PERSONAL AND KIT&HOBBY PRINTERS
Increases were seen in both unit shipments (up 12% YoY) and for system revenues (22% YoY) in the Personal* price-class in the period thanks entirely to Bambu Lab and to AnkerMake (which continued to deliver against its super-successful Kickstarter campaign.) Bambu Lab has taken the Personal 3D printer market by storm and was the market share leader in this fully-assembled class of Personal printers for the quarter. When these two companies are excluded however, aggregate shipments of Personal printers fell -28% YoY. Although former market leader Creality saw a marginal increase from shipments of its models in the Personal class, most vendors experienced double-digit YoY shipment declines.
Creality still dominates the lower regions of the 3D printer market and remains the undisputed leader in the DIY Kit&Hobby* class where its reported 4% shipment increase drove growth as other vendors saw sales fall (for example, Prusa Research unit shipments were down -7% YoY).
OUTLOOK
Half of the top ten revenue-leaders of 3D printer systems costing more than $2,500 - EOS, UnionTech, HP, Velo3D and Nikon SLM Solutions - saw at least some YoY growth in unit shipments in H1 2023. However, others including Stratasys, Desktop Metal, UltiMaker, 3D Systems and Formlabs all saw shipment decline for the first half of the year.
"In the same way, these companies have outlooks that are mixed, varied and inconsistent, reflecting the wide variation in macroeconomic forecasts", according to Chris Connery. "Many vendors are dealing with longer sales cycles, some facing a push-out of orders while others point to strong demand in Q2 2023; some point to early signs of a recovery but others still see the global economic environment as challenging and uncertain. What is certain is that interest rates remain high across the world and, for many potential buyers, the cost of capital continues to limit spending on new hardware."
Chart 2: Industrial 3D printer system shipments, revenues and forecasts by process and material
Considering all regions, all material types and all printer modalities, projections for the full year now indicate low-single digit unit shipment growth for the year (3%) but mid-teen System Revenue growth (14%.) Focusing on the leading Industrial price-class, growth of 5% is expected in Industrial polymer unit shipments with revenues on track to climb 9% YoY thanks mostly to inflationary price increases since 2022. Industrial metal shipments are expected to be more or less flat (up only 0.4% YoY) but the move to more expensive, more efficient multi-laser metal powder bed fusion systems across the world is expected to augment the effects of inflation and leading to system revenue growth of 15% for the full year, according to CONTEXT.
* Price classes for fully assembled finished goods: Industrial $100,000+; Midrange $20,000-$100,000 (this category was previously known as Design); Professional $2,500-$20,000; Personal <$2,500; Kit&Hobby printers require assembly by purchaser.
About CONTEXT
CONTEXT's global market intelligence, performance benchmarks and opportunity analysis empower clients to optimise operations and accelerate tomorrow's revenues. With over 35 years of industry partnership and experience reporting on large datasets, CONTEXT delivers analytics at all points in the value chain, providing clients with actionable insights rooted in concrete data and a profound understanding of customer needs. CONTEXT is headquartered in London, with over 300 staff across the world, and in 2019 was recognised as one of the UK's Best WorkplacesTM by Great Place to Work®.
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