In the past several years, Chinese companies have become significant players across different high-tech industries, positioning themselves as leaders. Government initiatives, such as the "Made in China 2025" plan, aim to build on earlier efforts by continuing to transform China into a global leader in industries crucial for reducing its dependence on foreign technology—particularly in areas like semiconductors, which are essential for many high-tech devices.
As an advanced and future-focused digital manufacturing technology, the local Additive Manufacturing (AM) industry has benefited from these initiatives, pushing Chinese 3D printing companies forward. AM technologies have significantly matured, evolving from low-cost FDM 3D printing to high-end industrial Metal AM solutions.
Last week, I had the pleasure of attending the Formnext South China event to meet local companies and also visited companies headquartered in Shenzhen.
Conducting business in China - the 3D Alliances team; Image source: 3D Alliances
The Chinese 3D Printing Industry 2024
The local industry has experienced significant growth over the past five years. As of today, it comprises a few hundred small to large companies in the software, hardware, materials, and services sectors of Additive Manufacturing (AM). Of these, around 15 OEMs seem to dominate and lead the market, offering industrial AM solutions, and some also provide printing services.
Leading Chinese AM Companies; Image source: 3D Alliances
The leading AM technologies in China are Metal, Resin-based, and FDM. In addition to industrial AM systems, the top companies offer a complete AM ecosystem that includes their own software tools and materials—providing a full end-to-end solution. Some companies have adopted a hybrid business model, selling both 3D printing systems and services through separate business units. For some of these companies, revenue from services accounts for half of their total annual revenue.
Among the leading companies, BLT and Farsoon are publicly traded on the Chinese stock market and, as of September 2024, rank among the top three AM companies globally by market capitalization.
When comparing their performance to Stratasys and 3D Systems, which represent Western publicly traded AM companies, we see a significant gap in valuations relative to yearly revenue. This gap can be attributed to two main factors: growth and profitability.
Publicaly-traded Chinese and NA AM Companies; Image source: 3D Alliances
*.Revenue estimation for 2024
**.Market cap as of September 2024
Recent Trends and Challenges
When profiling the local AM market, there are three main points to consider that make this market unique compared to the Western AM industry:
> Competitive Landscape
In recent years, the local AM industry has undergone a process similar to what the Western industry experienced a decade ago. Many players have entered the market, driving down the prices of systems and services, creating a much more competitive environment.
As a result, these companies are looking to expand globally, aiming to offer their solutions at competitive prices across EMEA and North America. This desire to accelerate their international presence is one of their main motivations, and their preferred go-to-market strategy involves building a well-established channel network.
Companies such as INTAMSYS, Farsoon, BLT, and UnionTech3D have already established branches overseas, adopting both direct and indirect sales strategies, while others are just beginning this process. Overall, this trend is expected to accelerate in the coming years.
> The Hybrid Business Model
Most of the large Chinese OEMs in the AM industry have established an additional business unit for services, offering various AM polymer and metal technologies. These units also provide capabilities such as CNC machining, casting, injection molding, and finishing. The goal is to generate an additional revenue stream and gain a deep understanding of the solutions their customers seek, particularly how AM can address these needs.
A great example of a successful service business is Unionfab, the AM services unit of UnionTech3D, which was founded over 20 years ago. As of 2024, here are the key facts and figures behind this remarkable project: over 800 employees, an installed base of more than 800 industrial-grade 3D printers (!), printing over 2 million parts annually, and serving both the local industry and customers from 170 countries worldwide.
> The Young Generation
An interesting trend across local companies is the significant role of the young and ambitious generation in China. Aged 25-35 and equipped with strong English and communication skills, they are often positioned as international business development and sales managers. Their responsibility is to identify effective ways to engage with potential business partners overseas.
Looking ahead 10-15 years, this generation is expected to rise through the management ranks, transforming how Chinese companies conduct business with foreign partners and individuals.
China's role in shaping the future of AM
There are two main reasons why Chinese AM companies are expected to play a larger role in shaping the future of the AM industry:
Western AM companies are facing growth challenges, creating a market vacuum that needs to be filled. Today, customers understand that adopting AM in design and manufacturing processes must be economically justified. If Chinese AM companies play their cards right, they can increase their market penetration in EMEA and North America at the expense of Western companies.
The maturity of several Chinese technologies has reached the levels of their Western counterparts. From Bambu Lab’s remarkable achievements in desktop 3D printing, to UnionTech3D’s polymer AM solutions, and high-end Metal AM systems by BLT and HBD—Chinese companies now offer end-to-end solutions for users ranging from hobbyists to industrial heavyweights. It’s reasonable to assume that these solutions will become increasingly attractive to Western users.
3D printed metal mold by UnionTech; TPM3D large-scale SLS. Images source: 3D Alliances
That said, Chinese AM companies face their own challenges when expanding overseas, including cultural differences, building a strong channel network, localizing digital marketing efforts, selling into sensitive industries like defense and medical, establishing branches in EMEA and North America, transferring knowledge to local teams, and dealing with logistics issues.
All in all, China is poised once again to play a major role in shaping the future of a highly technological industry.
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