Stratasys Ltd. (SSYS), a 3D printing company, recently stated that additive manufacturing (:AM) or 3D printing will strengthen manufacturing competitiveness by increasing supply chain efficiencies. Additionally, Stratasys and the National Association of Manufacturers (:NAM) also agreed on the point that additive manufacturing will benefit from the current economic condition, and have a considerable impact on the economy.
Additive manufacturing is a process of joining materials to make objects from 3D model data. The main functions of additive fabrication are designing/modeling, prototyping, and direct part production. The use of AM facilitates quick design change, which helps to save costs and time.
According to a recent survey made by Lux Research, 3D printed parts will be an $8.4 billion global market in 2025 led by automotive, medical and aerospace applications. Moreover, with the decline in cost of 3D printing as compared with traditional manufacturing, more and more industries are adopting 3D printing in their manufacturing plants.
According to Wohlers Associates, a consultancy firm, the 3D printing industry is likely to reach $6.00 billion by 2017. The research firm expects this industry to continue to show double-digit growth over the next few years.
Over the years, Stratasys’ additive manufacturing solutions have been used by companies in the automotive, aerospace, defense, electronics, consumer goods, education and other sectors to improve product designs. Stratasys is also working with the U.S. Department of Energy to develop AM processes to aid in production.
The 3D printing business is particularly attractive for Stratasys because of rival Hewlett-Packard Company’s (HPQ) decision to quit the market, as digital printing was only a small part of its business.
On the other hand, Stratsys is concerned about its high-cost business model and competition from big and small players like 3D Systems Corp. (DDD). Nonetheless, the acquisition of MakerBot is expected to improve the growth of its 3D systems business.
The company has a Zacks Rank #3 (Hold). Investors can also consider other companies in the technology space, such as Micron Technology Inc. (MU), which has a Zacks Rank #1 ( Strong Buy).
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