Navigating China’s 3D Printing Industry in 2024

China’s 2024 economic landscape presents a complex matrix of challenges and opportunities, deeply influenced by the aftermath of the COVID-19 pandemic, regulatory adjustments, and the global economic environment. Amid these dynamics, China’s additive manufacturing (AM) industry stands out as a beacon of innovation and technological advancement. This sector, pivotal for its role in industrial transformation and digital manufacturing, is at the crossroads of policy-driven support and market-driven challenges. As we delve into the intricate interplay between the broader economic scenario and the AM industry, it’s essential to recognize the transformative potential of 3D printing in steering China toward a more sustainable and innovation-led economic future.

Current Economic Landscape in China

The Chinese economy, navigating through the turbulence of post-pandemic recovery, deflationary pressures, and real estate sector woes, exhibits a moderated growth outlook for 2024. Economic activity has witnessed a resurgence, propelled by increased demand for services, resilient manufacturing investment, and public infrastructure stimulus. However, the journey is marred by volatility, with deflationary trends and subdued consumer confidence hinting at an uneven recovery path. The real estate crisis, in particular, remains a significant concern, given its substantial contribution to China’s GDP and household wealth. The sector’s instability, marked by developer defaults and plummeting home sales, underscores the urgent need for systemic reforms.

Government policies are finely tuned towards ensuring “stability” and fostering “common prosperity,” aiming to mitigate disparities and promote equitable economic development. The emphasis on innovation and the digital economy is evident through targeted support for emerging sectors such as semiconductors, new energy vehicles, and automation. Nonetheless, the shadow of regulatory uncertainties looms large, influencing investor sentiment and business strategies.

The State of 3D Printing in China

The AM industry in China, characterized by rapid growth and technological prowess, is a critical element of the country’s industrial upgrading and digital transformation agenda. With a keen focus on sectors such as aerospace, automotive, and medical devices, China’s AM industry is expanding in scale and advancing in technological sophistication. Government initiatives, including substantial R&D investments, innovation grants, and favorable policies, have bolstered the industry’s development. Yet, the sector is not immune to the broader economic challenges. Economic volatility and regulatory shifts pose significant risks, necessitating agile adaptation and strategic foresight from businesses within the AM ecosystem.

Recent reports highlight the burgeoning growth of the AM industry, with China being one of the largest markets globally. Significant investments in metal AM technologies and a growing emphasis on domestic production of 3D printing equipment and materials mark the industry’s evolution. However, the landscape is also characterized by intense competition, both from domestic startups and established global players. The push towards self-reliance in core technologies, as part of the broader “Made in China 2025” initiative, further underscores the strategic importance of the AM industry within China’s industrial policy framework.

Image Courtesy: HBD

Challenges Facing the AM Industry in China

The 3D printing industry in China is navigating through a myriad of challenges. Market fragmentation stands out as one of the significant hurdles, with many small and under-resourced companies vying for a foothold in the competitive landscape. This fragmentation leads to a lack of unified leadership and coherent integration within the industry, making it difficult for companies to scale up and strengthen their capabilities efficiently. Especially in the post-pandemic recovery phase, characterized by deflationary pressures and real estate sector woes, it sets a backdrop of uncertainty that affects investment and innovation across industries, including AM.

In response to these challenges, companies are expected to turn to mergers and acquisitions (M&As) as a strategic solution to quickly scale up, enter new markets, and integrate industry resources more effectively. M&As can consolidate a fragmented market and enhance companies’ core competitiveness by streamlining solutions and using resources more effectively, thus facilitating their transformation and upgrading.

Opportunities and Growth Drivers

Despite these challenges, the AM industry in China is poised for significant growth, driven by a confluence of factors that present substantial opportunities. Government support and policy initiatives underscore China’s commitment to technological innovation and industry growth, providing a solid foundation for the AM sector’s expansion. The national focus on industrial upgrading and digital transformation aligns with the strengths of 3D printing, offering vast opportunities for application and integration across various sectors. Emerging market demands in aerospace, automotive, healthcare, and consumer goods are increasingly adopting AM technologies for prototyping, tooling, and end-use parts, driven by customization, efficiency, and sustainability benefits. Investment in research and development, particularly in critical AM areas like materials science, process optimization, and software development, fuels technological advancements and enhances the industry’s global competitiveness, paving the way for a future where China’s AM industry could lead in innovation and application.

Moreover, the perspective trend of M&A among 3D printing companies presents a strategic opportunity for the industry to overcome market fragmentation, accelerate growth, and foster innovation. By leveraging M&A, companies can rapidly expand their development space, integrate valuable resources, and transition towards new growth drivers, ensuring sustainable development in a highly competitive market.

Deep Blue Aerospace employees examine an as built combustion chamber produced on Farsoon’s FS621M PBF LB machine. (Image Courtesy: Farsoon Technologies)

Competitive Landscape and Market Dynamics

The competitive landscape of the AM industry in China is marked by a vibrant mix of domestic and international players, each vying for dominance in a rapidly evolving market. The domestic players, buoyed by government support and a strong push for self-reliance in critical technologies, have made significant strides in recent years. According to Nanjixiong, despite of current challenging environment, at least six AM companies in China are expected to generate more than one billion yuan in revenue by 2023. Companies like Bright Laser Technologies (BLT), UnionTech, Eplus3D, Shining 3D, Creativity 3D, ELEGOO, and Anycubic are in this scene, demonstrating significant revenue growth and market penetration.

BLT, with its core business in metal AM, is projected to achieve a revenue of 12.32 billion Yuan in 2023, indicating a 34.2% increase from the previous year, with a net profit of 1.48 billion Yuan, up by 87%. This growth is attributed to continuous market and application area expansion and the development of customized products and proprietary AM equipment. Moreover, BLT’s involvement in high-profile projects, like the use of its AM technology in the aerospace and consumer electronics sectors, exemplifies the industry’s potential. The company’s metal AM technology has been instrumental in manufacturing critical components, such as the titanium alloy hinge covers for the Magic V2 foldable smartphone by Honor, showcasing the penetration of 3D printing technology in the 3C (computer, communication, and consumer electronics) sector.

The super factory plan to have over 700 metal 3D printers [Image Courtesy: BLT]

In the consumer-grade 3D printing market, Creativity 3D has become a leading consumer-grade 3D printer manufacturer with annual shipments exceeding 1 million units as of 2020, translating to revenues surpassing 1 billion Yuan. ELEGOO is another successful player in this market, projected to earn revenues exceeding 1.2 billion Yuan by 2023. Their effective cross-border e-commerce strategy and market expansion have contributed to their success, demonstrating the potential for Chinese AM companies to achieve global competitiveness.

International companies also play a crucial role in China’s AM industry, bringing in advanced technologies, extensive experience, and global networks. Giants like EOS, Stratasys, and 3D Systems have established a strong presence in China, capitalizing on the country’s vast manufacturing base and transitioning toward high-value-added manufacturing.

Trade tensions and geopolitical factors further influence the market dynamics, leading to increased scrutiny of foreign companies and a heightened focus on domestic capabilities. This has spurred investment in local R&D and the development of indigenous AM technologies, aiming to reduce reliance on foreign expertise and mitigate the risks associated with global supply chain disruptions.

Conclusion

China’s AM industry, poised at the intersection of innovation and economic transformation, faces a future filled with both challenges and opportunities. As the industry continues to evolve, its success will hinge on the ability to navigate regulatory complexities, harness technological advancements, and capitalize on emerging market demands. In doing so, the AM industry in China can contribute to the country’s industrial upgrade and play a pivotal role in shaping the future of global manufacturing.