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Excessively weak INDUSTRIAL polymer 3D printer shipments in all regions drag industry down as metal systems continue to grow in China

London, 16th October 2024 - Second-quarter results for global 3D printer system shipments mirrored the trend from Q1, with year-on-year (YoY) declines in the INDUSTRIAL, MIDRANGE, and PROFESSIONAL price segments, while ENTRY-LEVEL devices continued their explosive growth, according to latest insights by global market intelligence firm CONTEXT.  

The INDUSTRIAL sector continued to struggle with weak global shipments of polymer systems, particularly polymer vat photopolymerization systems. As in Q1 2024, metal systems performed better, with China's domestic metal powder bed fusion (PBF) shipments standing out as a bright spot, growing 7% year-on-year.

“The latest insights into global 3D printer system shipments highlight very different trends at the high-end and the low-ends of the hardware market”, said Chris Connery, VP of Global Analysis at CONTEXT. “The slow-down in new equipment shipments in the all-important INDUSTRIAL segment has allowed companies which focus in that space - particularly Western companies - to take a step back to look at their own financial health with many then moving forward with long-coming consolidation. Conversely, the continued acceleration of the consumer-centric ENTRY-LEVEL has allowed companies which focus on this segment to thrive in the moment.”
 

Three key developments marked Q2 2024:

• The INDUSTRIAL segment saw a deeper decline, with shipments dropping -25% year-on-year, marking the fourth consecutive quarter of decline.

• The PROFESSIONAL segment showed improvement, largely driven by a successful new product launch from Formlabs.

• The ENTRY-LEVEL price class experienced even more robust growth, with shipments soaring 65%.

The 7% year-on-year increase in global 3D printer revenues for the quarter was driven entirely by the surge in ENTRY-LEVEL shipments, with revenues 58% higher than in Q2 2023. Revenues in all other segments declined compared to the previous year, with the sharpest drop in the PROFESSIONAL segment (down -21%), though the -17% decline in INDUSTRIAL printer revenues is the most concerning. ENTRY-LEVEL printers accounted for 48% of global system revenues during the quarter, surpassing INDUSTRIAL systems (38%) to become the top-grossing price class.  

Chart 1: 3D printer system revenues and growth by price class

INDUSTRIAL POLYMER SYSTEMS

The biggest challenge in this $100,000+ category, where total shipments dropped -36% YoY, again came from low levels of vat photopolymerisation shipments. These were down -47% in aggregate with weak shipments both from Chinese vendors (market leader UnionTech saw a notable YoY decline) as well as from Western Original Equipment Manufacturers (OEMs). In particular, 3D Systems continues to struggle as its top customer has been stymied by weak downstream demand as inflation has shifted consumer spending away from cosmetic dental procedures. UnionTech remained dominant in the global INDUSTRIAL vat photopolymerization market, with 3D Systems leading in the West.
 

INDUSTRIAL METAL SYSTEMS  

In Q2-24, -7% fewer INDUSTRIAL metal printing systems were shipped across the globe than in the year before although, on a trailing-twelve-month (TTM) basis, shipments were up marginally (by 2%).

Powder Bed Fusion (PBF) remained the most popular technology, accounting for 78% of metals units shipped and 85% of metals revenues. This modality also represented the best-performing category as shipments were essentially flat YoY (down only -1%) and completely flat on a TTM basis. Nonetheless, a few OEMs, all from China, saw exceptional TTM shipment growth (31% for BLT, 29% for Eplus3D and 54% for ZRapid Tech). In fact, Chinese vendors (mostly selling domestically) accounted for 53% of all INDUSTRIAL metal PBF systems shipped in the period but for only 32% of revenues. However, growth in this region appears to be decelerating: just 5% more printers were shipped from China in Q2-24 than in Q2-23 (compare this with 19%, 38% and 45% YoY growth in the previous three quarters). For the period, BLT was the global leader in INDUSTRIAL metal PBF system shipments (units) with EOS again enjoying the top spot in terms of system revenues.

Western vendors saw YoY shipments of INDUSTRIAL metal PBF machines improve slightly but they were still -2% down YoY. There were improvements for some vendors - notably TRUMPF (shipments up 22%) and Colibrium/GE Aerospace (35%) - while others experienced a more challenging quarter. Nikon SLM Solutions shipped fewer printers in the period but saw very strong YoY revenue growth (over 30%) as end-market attention has largely shifted to their NXG systems and shipments of these ultra-advanced systems continue to accelerate. Many other vendors have introduced high-efficiency (large build volume and high laser count) metal PBF systems in recent quarters, but only Nikon SLM Solutions is shipping them in volume.

Chart 2: Global 3D printer shipments by price class (note different scales)

MIDRANGE SYSTEMS  

MIDRANGE ($20,000–$100,000) 3D printer sales were again down in Q2-24 with -6% fewer products shipped globally in Q2-24 than in the same period of the previous year. In this near-term quarter, all modalities except vat photopolymerization were down. On a TTM basis, all processes were down with -10% fewer products shipped collectively in the category from Q3-23 to Q2-24 than from Q3-22 to Q2-23. The previously accelerating polymer PBF market - mostly driven by Formlabs in this price class - seems to have settled into a run rate. Most of the vendors doing well in this space at the moment are from China mainly selling domestically. Q2 shipments from Chinese vendors were up 18% YoY while those from all others across the globe were down -15%. All Western vendors in the top 10 saw shipments fall while the opposite was true for the three Chinese vendors - UnionTech, ZRapid Tech and Flashforge. UnionTech shipments were 12% higher than in Q2-23 and Flashforge shipments rose a whopping 90%. Stratasys, UnionTech and Formlabs were again the top 3 global vendors in the category.

PROFESSIONAL SYSTEMS  

After several quarters of sizable YoY shipment declines, shipments of printers in the PROFESSIONAL price class ($2,500-$20,000) were down only −10% YoY in Q2-24. This was mostly thanks to a strong product transition by Formlabs. On a TTM basis, shipments were still down significantly (-28%) with much of the demand shifting to lower priced ENTRY-LEVEL products. UltiMaker and Formlabs remained the top global vendors in this price class with UltiMaker focused on material extrusion devices and Formlabs on vat photopolymerisation products. This segment has historically favoured FDM/FFF solutions with material extrusion shipments typically outpacing vat photopolymerisation 65/35. This has changed over the last year or so and the shipment rate was closer to 50/50 in the second quarter of 2024. Shipments of material extrusion printers were down -21% YoY but those of vat photopolymerisation products were up 6%.

ENTRY-LEVEL SYSTEMS  

The low-end ENTRY-LEVEL category (<$2,500) excelled again in Q2-24 with shipments up 34% sequentially, 65% YoY and 41% on a TTM basis. Creality continued to crush the competition with shipments up 64% YoY (and 45% for the full half year) accounting for 47% of all printers shipped in the price class during the quarter. Their growth rate was only bettered by Bambu Lab which again registered triple-digit YoY shipment growth (up 336%) giving them 26% of the global share. A total of 94% of shipments in this sub-$2,500 category were from the top 4 vendors – Creality, Bambu Lab, Anycubic and Elegoo.

OUTLOOK  

The second quarter of 2024 was difficult for many Western companies - Stratasys, Velo3D and Markforged all announced layoffs and others filed for bankruptcy. Long-expected major consolidations in the region accelerated as Nano Dimension announced acquisition plans for both Desktop Metal and Markforged. Even though high interest rates continued to delay new CapEx spending, most OEMs reported high levels of interest and engagement, however.

“This suggests that INDUSTRIAL 3D printer purchases are poised to see strong shipments once the cost of money comes down, much in the same way that markets opened up immediately post Covid”, said Chris Connery. “The aggressive half-point interest rate cut the US Federal Reserve announced in September (its first cut in four years) was welcome news for many in the industry who see it as a great start and anticipate three to four such cuts by H2-25 that will allow businesses to begin to significantly improve.”

Based on this outlook, 2024 forecasts for the crucial INDUSTRIAL price class have been downgraded, with recovery now anticipated in the latter half of next year, according to CONTEXT. Despite this, marginal growth is still expected in 2024, with unit shipments projected to rise by 1% year-on-year and revenues by 6%, driven primarily by domestic demand for metal PBF systems in China. Short-term forecasts for the MIDRANGE and PROFESSIONAL segments have also been lowered, with fewer printers expected to ship in 2024 than in 2023. However, high single-digit to low double-digit growth is predicted for 2025.

While China struggles with weaker than expected GDP growth, Chinese vendors continue to do well both domestically (in the metal PBF systems INDUSTRIAL category) and overseas (as almost all ENTRY-LEVEL vendors are Chinese). Several Chinese OEMs (some focused on the INDUSTRIAL sector and some on the ENTRY-LEVEL) are set to go public and there is some concern that that recent shipment growth is the result of market pushes of product ahead of their flotation. However, there is no regional or channel inventory build-up and this suggests that all current demand is real demand.

“Over the longer term, the INDUSTRIAL segment is expected to grow the most – with a five-year forecast CAGR of 19% – as the cost of capital lowers and as additive manufacturing is more and more leveraged for volume serial production”, said Chris Connery.

ABOUT CONTEXT

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Funda Cizgenakad

T: +44 7876 616 246

funda@contextworld.com