In the recent euphoria over the potential for 3D Modeling/Rapid Prototyping (RP) to change the world, machine tool companies have been left behind by investors. The promise of RP and Direct Digital Manufacture (DDM) or Additive Manufacturing (AM) has shifted investor’s views far into the future and left the shares in machine tool companies like Hurco (NASDAQ:HURC) and Hardinge (NASDAQ:HDNG) appearing quite inexpensive. Many traditional CNC (computer numerical control) technologies offer capabilities that will fill gaps in AM for years to come. It is a long way before AM replaces subtractive fabrication processes in many applications. This is true for a variety of reasons, primarily limitations of material choice, unproven material properties, cost, accuracy and build envelope. In many areas CNC is likely to never be supplanted by AM.
Limited Current End Use Production
Despite all the hype and discussions of RP machines making us clothing and robots etc., in the comfort of our homes, RP does not currently produce end use parts at a reasonable cost for many purposes. It is still primarily a design tool that greatly improves the product development cycle by allowing for rapid creation of models for testing the three F’s – Fit Form and Function – thereby accelerating product development and proof of concept. It is also a useful technology for some rapid tooling applications such as mold making. RP still falls flat in many situations compared to CNC in cost, materials and even accuracy, and this is not likely to change anytime soon. Powdered plastics and metals for AM do not share the exact properties of its bulk metal peers and without more evaluation and standardization AM will not be used in production runs where specific strength or tolerance properties are vital for quite some time.
Production output from an RP machine, regardless of technology, is not equivalent to bulk metal or injection mold and the material choices are still limited to the relatively small number of available powder formulations, while CNC material application is virtually limitless. The strength and durability properties of additive fabrication derived materials are also a ways from being proven as acceptable substitutes for its bulk or injection peers when applied to production quality parts.
From The Worldwide Guide to Rapid Prototyping (WGRP):
“Plastics account for the preponderance of materials used in rapid prototyping systems. While in some cases, the plastics have the same name and chemical composition as familiar, home-grown materials such as nylon or ABS, there are substantial differences in what comes out of an RP system compared to the results from machining or injection molding the same materials. That's partly because the material has to be in a special form to be used by a rapid prototyping system in the first place, and secondly because the RP system operates on it in a different way.”
“Plastics from an RP system may not replicate the characteristics of an injection molded plastic part very well. That's because, as mentioned previously, while the chemical composition might be exactly the same the physical processing is completely different. Many plastics have long, linear molecules that provide an anisotropic "grain structure" to a part because as they flow in the heated liquid state through the mold under pressure, they orient themselves with respect to one another. The process of cooling within the mold also has an effect. This is not what happens during an RP process and as a consequence the physical properties can be quite different.
It should be noted that while the choice of plastic-like materials is the greatest available in the rapid prototyping field, it still is a very limited one - really just a handful compared to the literally thousands of materials and grades available for other processes. Also, the materials available are not well-characterized for many important properties, and most are also very expensive.“
“Metals - Commercially available choices are extremely limited for the direct fabrication of metal parts by rapid prototyping. However, numerous technologies are under development in university, government and commercial laboratories which will broaden future selection.”
“All rapid prototyping methods which directly produce metal parts will almost certainly require final machining and other secondary operations before acceptable final finishes and tolerances are achieved, although there may be a few exceptions based on the requirements for a particular part. Before they can be final-machined, metal and ceramic parts made by selective laser sintering (SLS) must usually undergo a thermal baking cycle to lightly consolidate them into a "brown" part, and then they may undergo a final thermal cycle to sinter and infiltrate them with a material to make them fully-dense.”
But looking to the future materials production from AM is improving rapidly and impressively. From an article in The Engineer, The Rise of Additive Manufacturing:
“In theory, said Reeves, the components produced are already strong enough to be relied on in the most testing scenarios. ’On paper, metallic additive parts have mechanical properties that are better than cast and getting towards wrought, but there is currently no agreed standard for material and process quality. Once we start to see some recognized standards for testing then we’ll see people starting to put some faith behind the technology and putting it into applications,’ he said.”
The Promise of Nanotechnology Kicks In
I expect that over time material science will yield additive fabrication materials, polymer and metal, that have unique and unprecedented properties far eclipsing standard materials. This is where the promise of nanotechnology, building up from the atomic level, truly begins to deliver new and industry changing results. We will see materials that are stronger yet lighter, flexible, ultra durable and simultaneously conductive; delivering all types of material property iterations previously unattainable in a non additive world.
Shares of CNC Companies Appear Cheap
Still, the evolution of AM is going to take time, maybe decades and CNC is still an improving technology likely to remain vital to manufacture for years to come, should we buy shares in more cheaply priced publicly traded machine tool companies Like HURC and HDNG? I have been trying to convince myself the answer is yes for weeks now but unfortunately I keep landing on no. While these stocks are inexpensive and the products impressive, I can’t confidently invest in a sector that is under attack from a new and disruptive technology. While CNC will continue to maintain a strong presence, AM will continue to improve technologically and gain share in manufacturing applications.
*Source: Yahoo Finance base year 2011
Big Industry is Embracing AM
From a recent GE press release titled GE Intensifies Focus on Additive Manufacturing:
- Will achieve dramatic reductions in GE’s material needs and enable more advanced product designs across the company’s industrial businesses
- GE researchers already working on additive manufacturing technologies for healthcare and aviation applications
“For as long as the world has been making things, manufacturing has been a game of subtraction where you cut and machine parts down into the product you want,” said Prabhjot Singh, a mechanical engineer and project leader on the ultrasound transducer project. “While these processes have improved, valuable time and excess raw materials are still lost. With new additive manufacturing processes like 3-D printing and laser deposition, the traditional ways of manufacturing are being turned upside down. By adding instead of removing material to design and build a product, you can dramatically reduce the time, cost and amount of material required to make it.”
Should We Buy RP Stocks?
As I wrote previously, I don’t believe the currently public crop of RP companies, Stratasys (SSYS) and 3D Systems (DDD) offer great value at current prices. By my analysis, both appear too expensive and their technological leadership is in question. The biggest strides appear to be happening at private companies like EOS in metals and Objet Geometries in smooth surface polymers, companies I will be watching for IPOs in the future. The industry prospects are too impressive to ignore and simultaneously too threatening to CNC to consider those companies for alternative investments. At this point I believe it best to sit on your hands and watch as things develop. The next move is coming, just not now.
From The Engineer:
But most compelling of all, Hague (Prof Richard Hague, AMRG) explained, is the almost limitless freedom the technology gives to designers. ’It frees you from the constraints of traditional manufacturing processes. It changes the kind of products you can make and the way you design things. You can make very, very complicated geometries. It’s almost as close to Nirvana as you’re ever going to get.’
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.