According to a recent article from 3DAdept, a substantial amount of metal 3D printing equipment—including machines for printing, processing, and manufacturing metal powders—is up for auction via Tauber-Arons Inc. and Aaron Industrial Solutions. A Timed Online Auction is set to take place on February 07, 2024, with bidding starting at 11:00 AM and equipment valued at $10 million. Not reported was that the assets belong to Northern California-based Uniformity Labs, a small startup dedicated to producing metal powders for the additive manufacturing industry.
Founded in 2014 as a spin out of Princeton University, Uniformity Labs aims to introduce unprecedented quality and throughput in metal 3D printing by providing uniformly processed powders. The company made significant progress toward that goal, shipping as much as 100 tons in 2022, raising over $50 million, releasing over 10 products, and partnering with a number of key players in the AM sector, including AddUp and Desktop Metal. Its products range from stainless steel and aluminum to titanium, nickel alloys, and cobalt chrome for laser powder bed fusion (LPBF) and binder jetting.
Nevertheless, in June 2023, 3DPrint.com began to hear chatter that Uniformity may not have been on steady footing. Given the negative overall macroeconomic environment, such a situation was faced by numerous AM companies, both public and private firms. We were unable to obtain a comment from the startup’s leadership.
Given the newness of many of the machines being auctioned, it seems clear that Uniformity has likely attempted to maintain operations as long as possible. Among the equipment being sold is a 2022 ALD Viga 35 Vacuum Gas Atomizer valued at $3.5 million, CNC machines, Netzsch Classifiers, Plasma Spherodization Reactor, and various other high-end laboratory and production equipment. Uniformity is also auctioning the following metal 3D printers: 2021 SLM Solutions SLM 280HL dual 700W LPBF system, 2016 SLM Solutions SLM 125M, 2016 EOS EOS M290, 2021 Desktop Metal P1 binder jet 3D printer, and 2021 Desktop Metal Shop system.
The auction represents the current financial downturn that is negatively impacting the AM sector, an especially difficult time for startups and publicly traded firms. However, one party’s troubles may represent another’s opportunity. For the past several years, private equity companies have made a strategy of acquiring distressed assets to create AM roll-ups, most often service bureaus. One can imagine a group like CORE Industrial Partners or American Industrial Partners purchasing Uniformity’s equipment to augment their service bureaus.
Otherwise, more well-off powder manufacturers could move in to buy the assets. This could be Praxair Surface Technologies or Carpenter Technology Corporation, which also owns LPW Technology, as well as Höganäs AB or GKN Hoeganaes. Other options include NanoSteel Company, GE Additive’s AP&C Advanced Powders and Coatings, and AMETEK Specialty Metal Products.
Regardless of who acquires the machinery, the auction sends a signal to the rest of the U.S. advanced manufacturing sector and beyond. Outside of a sheer indicator of the financial climate, the message is that advanced manufacturing intellectual property (IP) may be at stake. Uniformity is a comparatively small firm, with just three U.S. patents and numerous outside of the U.S. However, if a larger company were to face the same struggles, it could be essential for national security purposes for the government or its top contractors to bail out the business in order to protect that IP from falling into a competitor’s hands.
3DPrint.com Macro Analyst Matt Kremenetsky put it this way:
In the current global geopolitical climate, it would be unacceptable from both a security and an optics standpoint — to the extent that these are in fact separate considerations — to allow many more scenarios like this one to occur. In 2023, the U.S. Congress proposed multiple pieces of legislation aiming to strengthen existing laws designed to prevent federally funded R&D from leaving the U.S. domestic manufacturing ecosystem. Notably, not long after one of those acts was proposed for the second time, the Biden administration issued an executive order intended to accomplish exactly that, stating in the order that, “…it is the policy of my Administration that when new technologies and products are developed with support from the United States Government, they will be manufactured in the United States whenever feasible and consistent with applicable law.”
Relevantly here, at least some of the research leading to Uniformity Labs’ first patent was funded by the National Science Foundation. Now, it is not entirely clear what particular mechanisms have been put into place to prevent, for instance, Uniformity Labs’ assets from falling into hands with interests counter to those of U.S. national security. In many ways, though, the increased spending levels on domestic manufacturing that the Biden administration has made a top priority is that mechanism: however dire the straits one may consider the AM industry in the U.S. to currently be in, imagine what the situation would look like without the de facto fiscal stimulus from Department of Defense, etc.
Still, this development brings home the point that the U.S. is in need of clear, specific, and effective policy initiatives in place that can, in advance, prevent more cases like this from happening, as well as initiatives that can remedy the situation in a way favorable to U.S. interests when they do happen. For instance, I just wrote an article recommending that the Biden administration use the Defense Production Act (DPA) to encourage more U.S.-based 3D printing OEMs to buy American-made lasers, as well as to allow the relevant laser companies to ramp up capacity to enable that objective long-term.
It may sound alarmist on its face, but it would be well within the U.S. government’s wheelhouse to utilize the DPA to create something of a “Keep US Advanced Manufacturing in Business” fund. That would probably be a bad name for it, but the idea of such a fund, itself, would be exactly in-line with the role that government should play in its domestic manufacturing ecosystem. The AM Forward small business investment fund floated by ASTRO America at the Pentagon in August 2023 would serve this same purpose, too.
Americans need to lose their misguided skepticism of industrial policy if they want to compete with the economies currently outflanking the U.S. in the realm of manufacturing. That skepticism is especially misguided given the fact that it is government-initiated industrial policy that built the contemporary American economy, in the first place.
With this in mind, it’s possible that we’ll see important U.S. parties swoop in to acquire key assets when necessary. And, if they don’t, the government itself may have to step in.
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