3D Printing Financials: Nikon Bets on SLM Solutions for 2025 Growth

Nikon‘s (TYO: 7731) financial results for the third quarter reflect the challenges of a shifting market, but its investments in 3D printing continue to show promise. While the company’s legacy businesses in imaging and precision equipment faced headwinds, its metal additive manufacturing (AM) segment, spearheaded by its acquired companies Nikon SLM Solutions and Nikon AM Synergy (previously Morf3D), maintained strong momentum.

The demand for large-format metal 3D printers, particularly in aerospace and defense, is on the rise, backing Nikon’s push into digital manufacturing. This growth is especially strong in North America, where the metal AM market expands as industries seek larger, more productive equipment to meet increasing demand.

For the nine months ending December 31, 2024, Nikon reported revenue of ¥512.6 billion ($3.5 billion), a 3.1% decline year-over-year. Operating profit dropped significantly by 76.4% to ¥8.1 billion ($54.7 million), mainly affected by a delayed recovery in the semiconductor and electronic components markets and restructuring costs.

Despite these setbacks, Nikon’s 3D printing division, housed under its Digital Manufacturing Business, stayed strong, with revenue climbing 31.3% year-over-year to ¥18.2 billion ($123 million). The operating loss in this segment narrowed thanks to increased sales of SLM’s large-format NXG metal 3D printers, which are commonly used in aerospace, automotive, and energy industries to produce complex metal components such as lightweight aircraft parts, high-performance engine components, and industrial tooling.

Operating profit in this segment also improved, with losses shrinking by ¥1.7 billion ($11.5 million) due to higher sales at SLM Solutions and the disappearance of one-time restructuring costs from the previous year.

Nikon entered the 3D printing ecosystem by acquiring SLM Solutions and Morf3D. SLM, known for its high-productivity metal 3D printing systems, has played a key role in Nikon’s industrial expansion. The NXG XII 600 series, a large-format laser powder bed fusion machine, has been a key growth driver, with a strong order intake in the third quarter. What’s more, the demand for scalable metal printing solutions, particularly in aerospace, continues to position SLM as a strategic asset within Nikon’s portfolio.

Meanwhile, Morf3D, an aerospace-focused AM firm later renamed Nikon AM Synergy Inc, remains essential to Nikon’s push into high-performance industrial applications. With defense contractors and commercial aerospace firms seeking lighter, more efficient components, Nikon AM Synergy’s expertise in topology optimization and metal part qualification is proving valuable. Combining Nikon’s precision engineering and Nikon AM Synergy’s additive expertise helps the company’s ability to serve mission-critical industries.

Despite the positive developments in 3D printing, Nikon is navigating a difficult financial landscape. The precision equipment and components businesses saw revenue declines due to weak semiconductor capital investment and a delayed recovery in factory automation markets. Because of this, Nikon has lowered its full-year revenue forecast to ¥720 billion ($4.9 billion), citing that important industries face lower demand. For example, Nikon executives said there were lagging sales in Extreme Ultraviolet (EUV) lithography-related components, optical parts, and encoders. This was caused by a delayed recovery in the semiconductor and factory automation markets.

However, the Digital Manufacturing Business remains a bright spot. Nikon’s long-term plan for SLM includes achieving profitability at the EBITDA level in fiscal 2025, with full operating profit expected by fiscal 2027. This trajectory aligns with broader industry trends where AM is becoming more critical for advanced industrial applications. The market’s shift toward larger, more productive systems plays directly into SLM’s strengths, offering Nikon a foothold in a high-growth industry.

During an earnings call with investors, Yasuhiro Ohmura, Nikon’s Chief Technology Officer (CTO), said that to strengthen its position in the semiconductor industry, Nikon is also developing a new ArF (Argon Fluoride) immersion lithography system in collaboration with a major semiconductor manufacturer. ArF immersion lithography is a key technology used to produce advanced semiconductor chips, relying on a 193-nanometer ArF laser and a liquid immersion process to create ultra-precise circuit patterns on silicon wafers.

This next-generation platform is designed to be compatible with other companies’ lithography systems, making it easier for chipmakers to adopt. Nikon plans to deliver a prototype by 2028 as it looks to expand in the growing market for ArF immersion lithography. As chipmakers adopt more 3D designs for memory (DRAM) and processors (logic chips), the need for precise and efficient manufacturing tools is increasing. Nikon sees this as a key opportunity for future growth in the semiconductor industry.

Looking ahead, Nikon expects strong demand for 3D printing to continue, particularly for SLM Solutions’ large-format metal 3D printers. Orders for the NXG series hit a quarterly record high in Q3, and sales are expected to grow through the fourth quarter and into the next fiscal year. Nikon expects SLM Solutions to be profitable on an EBITDA (earnings before interest, taxes, depreciation, and amortization) basis this year, with full operating profit next year and the entire Digital Manufacturing Business turning profitable by 2027.