We noted after President Obama’s State of the Union speech last week the enthusiasm among investors for the relatively new field of 3D printing. U.S. investors are not the only ones with any eye on that technology. The Chinese government has been backing research into 3D printing for nearly two decades and the country now has four major research centers working on bringing the technology mainstream.
Aside from the heady valuations of the three publicly traded U.S. 3D printing companies and the single publicly traded 3D service printer, the Chinese thrust into the technology is another reason to be cautious. Equipment makers 3D Systems Corp. (NYSE: DDD), Stratasys Ltd. (NASDAQ: SSYS) and ExOne Co. (NASDAQ: XONE), and service provider Proto Labs Inc. (NYSE: PRLB), all trade at multiples of around 50 or more. (ExOne just came public and has no earnings so far.)
A group of Chinese researchers has developed a 3D printing device that can churn out a wing part for an airplane at a cost that is 90% below the cost of traditional manufacturing. A report at CaixinOnline spells out the goal: “Researchers are still working on the technique’s stability, and hope someday it can be used for the kinds of repetitious tasks involved in mass production.”
That day is probably well into the future, but sales of 3D printers are expected to rise from about $1.7 billion in 2011 to $3.7 billion in 2015 and $6.5 billion by the end of 2019. The U.S. makers currently control about two-thirds of the market, but the Chinese government is currently drafting standards and regulations for the industry and plans to introduce tax incentives to encourage development.
It has taken 3D printing nearly 25 years to get to where it is today. It might not take that long for the next big step, but a huge incursion into manufacturing processes will not happen overnight either.
Sponsored: Attention Savvy Investors: Speak to 3 Financial Experts – FREE
Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.