Research Updates

3D Printing Industry Resets Expectations for 2023

LONDON, 13 April 2023 - In the last quarter of 2022, global 3D printer shipments continued the trend established earlier in the year with volumes flat or falling.

While industrial unit shipments dipped, system revenues rose again thanks to inflationary price increases and a shift at the highest end of the market towards more efficient (and higher priced) Industrial metal machines. 

With their end-market buyers still challenged by global inflation and fears of regional recessions, 3D printer vendors across the world have begun to shift their focus from market expansion to profitability and reset their expectations for 2023 to single-digit unit sales growth.

INDUSTRIAL SYSTEMS

In the key Industrial price class (which accounted for 57% of global system revenues in Q4 2022) shipments were down -13% year-on-year (YoY) but revenues rose +7% thanks to average prices increasing by +23%.

While this was, in part, due to inflation, growing demand for large metal powder bed fusion systems also played a part. Between polymer and metal-based systems - which collectively accounted for 94% of the category unit total - Industrial polymer shipments dropped -19% YoY in the quarter while metal shipments fell -11%.

Industrial metal shipments had previously seen eight consecutive quarters of growth led by powder bed fusion systems and accelerated shipments into China. These latest figures show falling sales for Western and Chinese companies alike and metal powder bed fusion printer shipments down -5%. Nonetheless, shipments of the newest multi-laser, large build-volume systems from vendors such as Velo3D and SLM Solutions (recently acquired by Nikon) have continued to grow leading to an overall revenue increase of +26% for metal powder bed fusion printers. While the formerly red-hot China region saw shipments fall -5% YoY, it remained the world's largest market - the destination for 39% of Industrial metal 3D printers from across the globe. The most concerning change in Q4 2022 was the -22% YoY volume drop for shipments into the US. 

Chart 1: Industrial 3D printer systems: global shipments and revenues

Over the year as a whole, shipments of Industrial polymer printers dropped -10% YoY while metal printer shipments rose +5%. Within the metal category, powder bed fusion printers, which accounted for 75% of all Industrial metal systems, saw nice demand and were less hampered by their own supply-chain limitations, resulting in shipments rising +12% for the year. While polymer and metal printers dominate the Industrial class, representing 57% and 39% of the market respectively, two nascent material categories seeing noteworthy shipment growth for the year were ceramics and composites. While neither category rose above a 2% share, shipments of ceramic printers rose +34% thanks to strength from vendors like 3DCeram, Carima, Lithoz, Nano Dimension (after acquiring Admatec), Xjet and others while Markforged helped to create a new sub-category of Industrial composites thanks to ramped-up shipments of their FX20.

MIDRANGE SYSTEMS

Midrange 3D printers, costing $20,000-$100,000, provided a bright spot in the Q4 2022 market as +20% more of these machines were shipped across the world than in Q4 2021. Price increases have shifted some existing printers into this class but most of the growth was organic and due to take-up of new products. Stratasys remained head-and-shoulders above the competition and shipped 28% of all printers in this price class but Formlabs made a remarkable entrance into the class with its enhanced Fuse SLS polymer powder bed fusion line and vaulted into the number two position. Other new systems that helped the category grow included Stratasys' Origin platform and UnionTech's extension of its DLP vat photopolymerization platform as well as products from Sinterit, Roboze, Xact Metal and Desktop Metal's Desktop Health line. Well-established companies moving beyond their initial or core technology to also offer solutions for other materials or using different processes in this way has driven expansion of the 3D printer market time and time again and has nearly always resulted in sustained growth.

Chart 2: Midrange 3D printer systems: global shipmentsby model/series (new models highlighted)

PROFESSIONAL

The Professional price class covers 3D printer shipments costing $2,500-$20,000. In Q4 2022 shipments of these were down for the third consecutive quarter, this time by -12% YoY. Revenues remained more or less flat, mostly as a result of inflation. UltiMaker, the market share leader in the class, saw a YoY -26% decline in aggregate shipments for products in this price-point (combining the MakerBot products which fall into this price class along with its Ultimaker brand products) but saw nice initial success with new products in other price-classes. Of the Top-5 vendors, Raise3D performed best in the fourth quarter, shipping +32% more printers YoY. Systems using LCD-based vat photopolymerization techniques such as Nexa3D's LSPc technology were winners over the year with +7% more machines shipping in 2022 than in 2021.

PERSONAL AND KIT & HOBBY

Personal 3D Printer shipments dropped -2% from a year ago in Q4 2022 while revenues rose +16%. Kit & Hobby shipments were up +15% for the quarter with Creality remaining the dominant market-share leader in this low-end. While overall consumer spending in the United States (the largest end-market for this low-end with North America representing 40% of the collective category's shipments) was quite weak in Q4, shipment rates in this category held up a bit better than expected in the region. While vendors of enterprise-focused systems are able to better cope with inflation by raising prices, many selling the smallest, cheapest printers are finding it increasingly difficult to make money. As a result, the period saw the beginning of the exit of some higher profile companies from the market including XYZprinting which divested part of its SLS business line to Nexa3D and announced its general exit from the 3D printer market. Other, more regional brands including S. Korea's Sindoh and the US' Dremel (formerly offered by Bosch) downsized, sold-off or otherwise defocused efforts on the 3D Printing market.

OUTLOOK

While the forecast for 2023 new printer shipments has been pared back, expectations are that revenue growth will once again far outpace unit growth. Inflation looks set to push prices up even more and the move toward higher-end metal powder bed fusion machines does not seem to be over.

The prospect of low- to mid-single-digit unit shipment growth applies to all major price classes with Industrial printers poised to do best (shipments are forecast to increase by +7% and revenues by +19%). While 2023 is set to be challenging, there is still a longer-term momentum: people across many industries still consider 3D printing a viable means of localising production to mitigate future supply-chain issues. As a result, the forecast is +28% CAGR in system revenues for the key Industrial printer market over the next five years.

* Price classes for fully assembled finished goods: INDUSTRIAL $100,000+; MIDRANGE $20,000-$100,000 (category renamed Q1-23 from DESIGN); PROFESSIONAL $2,500-$20,000; Personal <$2,500; Kit & Hobby printers require assembly by purchaser.

Inflation and increasing demand for high-end systems prop-up Industrial 3D printer revenues; unit sales in many categories fall across the globe.

LONDON, 18 July 2023 -  In a quarter which saw companies jockeying to combine to create the world's first $1B+ 3D printing company, growth in product shipments varied across sectors as economies all over the world grappled with inflation and readied themselves for potential recessions. While unit shipment growth varied, system revenues were up nicely across the board thanks to inflationary price increases and the continuing shift in demand to higher-end metal systems.

Three of the world's largest 3D printing companies - Stratasys, 3D Systems and Desktop Metal - were in the news in Q2 2023 with the competition between various companies to merge with or be acquired by Stratasys at the centre of it all. As the third quarter began, Stratasys was set to merge with Desktop Metal but continued offers from 3D Systems, and from nascent player Nano Dimension, leave the industry guessing.

Global shipments of new additive manufacturing systems in the Industrial and Professional price classes were down year-on-year (YoY) by -15% and -30% respectively in Q1 2023, while the Midrange, Personal and Kit&Hobby categories all saw shipment rise - up 18%, 34% and 29% YoY respectively. Revenues from system shipments in most price classes increased (the exception being those in the Professional class), leading to overall total system revenue growth of 15% on the previous year.

INDUSTRIAL SYSTEMS

The YoY fall in global shipments of Industrial 3D printers - the largest category accounting for 54% of total system revenues in the period - was mostly due to weaker sales of polymer systems (although sales of polymer material extrusion machines held up). This drop did not follow through to revenues, where an 11% YoY rise was driven by growing demand for higher efficiency metal machines.

While sales of almost all types of Industrial polymer printers fell, the sharpest drop was in the largest segment: vat photopolymerization. Shipments of these machines were down -33% with weakness seen across most geographies. In North America, for example, market leaders such as 3D Systems saw sales to certain dental markets slump as inflation led consumers to shift spending away from inessentials (such as cosmetic dental procedures) in favour of fuel and food. While the market in China is rebounding from a difficult end to 2022, market leader UnionTech saw weak sales of their higher-end vat photopolymer systems in this region as well, with weakness reported across many industrial sectors.

Industrial metal 3D printers fared better: revenues rose 25% YoY in Q1 2023 even though unit sales were down -8%. Powder bed fusion (PBF) printers accounted for 77% of shipments of metal systems but were basically flat (down -1% YoY). Although the number of sales was a challenge, the continued increase in demand for more productive (and larger) systems helped to push revenues for Industrial PBF systems up by +34%. Driving this revenue growth in the period were Velo3D and SLM Solutions (now part of Nikon) with each offering sought-after multi-laser, large build-volume (and higher priced) machines. Vendors seeing strong YoY unit shipment growth included GE Additive, allowing it to join Eplus3D and EOS as metal PBF unit market share leaders for the period.

Chart 1: Global Industrial Metal 3D Printer System Unit Shipments and Revenues

by Process 

MIDRANGE SYSTEMS

The 18% YoY growth in unit shipments of Midrange 3D printers - a price class dominated by polymer machines - was driven mostly by: (1) net-new products such as Formlabs polymer PBF Fuse line; and (2) strong domestic demand across multiple end-markets in China for UnionTech's vat photopolymer DLP offerings. Although cheaper polymer PBF machines are, in themselves, nothing new, Formlabs has been able to tap into newly discovered demand, super-accelerating growth: polymer PBF machines accounted for 17% of all shipments in the Midrange category in Q1 2023, compared to just 2% a year ago. Formlabs' success has focussed attention on this category with the period seeing 3D Systems acquire Wematter, and Nexa3D expand their offering by acquiring the XYZprinting product line focussed on the technology.

PROFESSIONAL

Shipments of Professional 3D printers dropped significantly in Q1 2023 (down -30% YoY) although revenues held up a bit better (falling only -15% YoY) as the weighted pricing rose 21% to $7,271. The drop in demand affected all of the Top 5 vendors but UltiMaker (which recently combined with MakerBot) remained the class leader in both unit shipments and system revenues. Foreseeing the stagnation in this category, vendors like Formlabs had initially introduced new products -- like low-end polymer PBF printers -- into this Professional price-class with some success seen in the year-ago quarter. Demand in recent quarters has however moved to a slightly more advanced product, which, when combined with inflationary price increases, has shifted this low-end polymer PBF segment into the Midrange category, a phenomenon which also contributed to the YoY comparison results. This price-class has been dominated however by Material Extrusion and Vat Photopolymerization shipments with Powder Bed Fusion shipments - while accelerating - yet to make much of a dent in overall market share. If shipments of polymer PBF systems are excluded from the figures for Q1 2023, shipments of core products in the category still fell by -28% (with Material Extrusion down -33% and Vat Photopolymer shipments down -18%) so it was a difficult quarter for vendors working in this price class regardless of how sales are measured.

PERSONAL AND KIT&HOBBY

Although there were excellent sales of lower-end, consumer-centric Personal and Kit&Hobby printers in Q1 2023, full-year growth expectations for the category remain subdued as these shipment increases were mostly due to improved supply-chain logistics and other factors than to new demand. For instance, AnkerMake shipped huge numbers of its Personal machines in the period but the demand was generated, and orders placed, during a super-successful Kickstarter campaign in 2022. One strong exception for the period was Bambu Lab where fantastic demand allowed them to successfully move from crowd funding into mainstream commercialisation; in fact, demand for their products was so strong as to help accelerate them to the number two global market share position in the quarter surpassed only by Creality.

OUTLOOK

While much of the industry's attention has recently been focussed on Western company consolidation, vendors like China's Farsoon have continued the trend in the Asia-Pacific region of going public by way of more traditional IPOs. While mergers, acquisitions and public listings often dominate headlines, such actions do not typically drive demand or market growth in the near term. Separate from the potential industry consolidation, the prospects for 3D printing remain bright, with demand growing and accelerating, especially as many companies are managing to keep supply-chain challenges and reshoring initiatives at top-of-mind while the inside-the-industry machinations play out around them. 3D printing continues to excel in prototyping, and there is still ample room for growth in the areas of mass customisation and low-volume production of complicated parts, but it is volume mass production which has the strongest growth potential in the coming years.

Chart 2: Industrial Unit Shipment Forecast by ASTM Process and Material 

For polymers, technologies such as vat photopolymerization and PBF are best poised to meet these mass production needs; whereas it is PBF and binder jetting technologies that are best positioned to accelerate metal AM into mainstream production. Indeed, metal PBF is the leading technology in the Industrial market and is on track to see a 5-year shipment CAGR of +26%. Meanwhile, although forecasts predict that metal binder jetting will remain behind PBF, the projected CAGR through to 2027 for this technology is +30%.

* 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.

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