GE Says 3D Printing Will 'Touch' 50% Of Manufacturing

Investor's Business Daily

General Electric (GE) is expanding the uses for 3D printers and expects the emerging technology to "touch" more than half of its manufacturing in 20 years.

With business segments in aviation, energy technology, medical equipment and home appliances, the industrial conglomerate's increasing adoption of "additive manufacturing" could shake up printer makers 3D Systems (DDD), Stratasys (SSYS) and ExOne (XONE) as well as U.S. industry overall.

Less than 10% of GE's manufacturing uses 3D printing in some form today, though that share should rise to 20% to 25% in 10 years and 50% or more in 20 years, the company told IBD.

"I'm not saying that 25% of all parts will be 3D-printed, but that 3D printing will touch it in some way," Christine Furstoss, GE's technical director of manufacturing and materials technologies, told IBD in an interview.

"Maybe it's the tool that we are using or the early prototypes we make," Furstoss said. "We are committed to driving it in as many areas as we can.

3D Already Plays Big Part

GE already uses 3D printing in a variety of areas from making medical devices and jet engine parts to prototyping components for washing machines.

Three-dimensional printing works by layering material, like plastic or ceramic, into a desired shape. Traditional manufacturing works the other way, by cutting out an object from a larger piece of material.

At GE, 3D printing isn't just a way to make products. It's also a way to try out new tools that could make products better.

"We don't have to invest the time and money into making a permanent tool, but we can 3D print one and be able to see if it really has the type of benefits we dream of," Furstoss said.

GE still plans to use conventional manufacturing techniques, especially for large components. But 3D printing, or additive manufacturing as GE calls it, is still seen playing a role, such as providing tools or repairing parts.

Big Rivals Likely To Follow

The company's push into 3D printing could pave the way for other large-scale manufacturers to embrace the technology. GE's use of 3D printers in jet engines, for example, could serve as a catalyst for United Technologies (UTX), which owns Pratt & Whitney, and Rolls-Royce.

"I expect engine makers Pratt & Whitney and Rolls-Royce will follow," said Troy Jensen, a managing director at Piper Jaffray.

Last year, GE Aviation agreed to acquire additive manufacturing company Morris Technologies, confirming its commitment to 3D printing.

But while it's clear GE has major 3D plans, it has no plans now to make its own printers.

"We have a lot on our plates to keep us busy," GE's Furstoss said. "We will always work with our strategic partners to do what's right for our collective companies. But at this point, we are focused on working on growth within GE.

That should come as good news to 3D Systems and Stratasys, which won't have to compete against the industrial giant. GE is also a big customer of most 3D printer makers, Jensen noted.

Tim Caffrey, an associate consultant at Wohlers Associates, doesn't expect GE or United Tech to build their own printers.

"I don't see that happening because they already subcontract a lot of their manufacturing to other firms.

Citigroup analyst Ken Wong agrees: "None of these guys wants to build the printers because ... that is not where their expertise is. But a lot of them are doing their own work on materials and new applications.

GE is slated to report third-quarter earnings on Oct. 18. Analysts expect flat earnings of 36 cents a share. Revenue should dip 1.3% to $35.9 billion.

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