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Advanced Manufacturing (Q2 2024): Metal additive manufacturing developments drive activity amid funding decline

This Edge Insight focuses on the notable activity relating to four SPEEDA Edge industries under the Advanced Manufacturing vertical—Smart Factory, Additive Manufacturing (AM), Digital Twin (DT), and Mining Tech—from April 2024 through June 2024 (Q2 2024).

Key takeaways

  • Funding
    • Q2 volumes fell in AM, DT, and Mining Tech, but Smart Factory recovery continued: The sector saw overall funding fall 11.9% YoY to USD 550 million due to the absence of Mining Tech funding rounds and a decline in fundraising for DT (down ~86% YoY) and AM (down ~12% YoY).
    • Like Q1, Smart Factory saw an uptick (up ~124% YoY to ~USD 392 million), as companies attracted funding to develop AI- and GenAI-based solutions and expand workforces. The most notable Smart Factory round was Bright Machines, which raised USD 126 million for product developments and software portfolio expansion.   
  • Partnerships 
    • Siemens continued to drive activity; considerable focus on metal-AM solutions, mobility adoption, and GenAI: Product partnerships accounted for ~60% of all Advanced Manufacturing partnerships in the quarter. Incumbents claimed ~54% of partnerships, with Siemens alone making up nearly a quarter. Industry-wise, AM led the way with ~46% of the partnerships; several startups entered partnerships to enhance metal-AM solutions, while others sought to expand their geographic presence.
    • Overall, we observed several trends continuing from the last quarter, including 1) continued mobility adoption of DTs driven by Siemens, 2) Microsoft entering partnerships to embed GenAI into DT solutions, and 3) the development of AI-based smart factory solutions. 
  • Product updates
    • AM was the main driver of product updates from new printer and material launches; AI took center stage in Smart Factory updates: Product updates were largely driven by the AM industry (17 out of 20) during Q2. Notably, more than three-quarters of these were centered on the launch of new materials and printers (most relating to metal-AM), as studies have indicated that material availability, design accuracy, and higher costs per part were among the main challenges for adoption.
    • Embedding AI for advanced robotics and analytics into solutions continued to take center stage for Smart Factory product developments this quarter, as it did in the last. Meanwhile, the DT industry continued to see developments that boosted DT accessibility. This quarter, Invicara launched an open-source software to develop DT applications (similar to ScaleOut’s launch last December), while NVIDIA launched several new APIs during the last quarter. 
  • M&As
    • DT and AM acquisitions accessed emerging technology, while Smart Factory activity prioritized horizontal integrations: We counted six major M&A activities in the Advanced Manufacturing space during the quarter, evenly split among the three hubs. Smart Factory activity was driven by Hitachi and Hexagon engaging in acquisitions to boost their existing smart factory solutions (horizontal integration).
    • Meanwhile, DT (which had no acquisitions in the past few quarters) activity was driven by companies in other industries (real estate and engineering solutions), leveraging DT technology through acquisitions. This was also seen in AM, where a metal parts manufacturer (Greene Group Industries) made an acquisition to incorporate metal-AM technology into its offering.
  • Regulations
    • The US Government launched a USD 285 million support program for DT semiconductor research; military adoption of AM continued: Government funding for Advanced Manufacturing industries continued; most notably, the CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act’s USD 285 million funding program to research DT.
    • Meanwhile, several US government organizations also funded AM developments and project calls, including the Office of the Secretary of Defense Manufacturing Technology Program (OSD ManTech); the Office of the Under Secretary of Defense, Research, and Engineering Manufacturing Technology Office (OSD [R&E]); and The US National Science Foundation (NSF). Moreover, military adoption of AM continued, with 3YOURMIND partnering with Phillips Corporation to offer defense solutions. 
  • Outlook 
    • AI and GenAI adoption is expected to continue, primarily in Smart Factory: Smart Factory has seen a steady inflow of AI-based developments through partnerships and product updates. Over the past year, we have seen AI commonly leveraged for analytics, advanced robotics, and defect detection. Meanwhile, GenAI has been used to help users develop automation code using natural languages, generate insights from operational data, create collaborative robots, and for predictive maintenance. Although the impact of GenAI has been somewhat subdued for the other two industries, we saw it used by to create a more immersive DT experience and for remote operations controls. Meanwhile, AM has also benefited from using GenAI to offer advanced design capabilities and greater user support. Accordingly, we are likely to see similar developments going forward, as companies partner and enhance their products to realize the full potential of AI.
    • Expansion in the metal-AM space: Metal usage in AM can be hindered by manufacturing speed, cost, and scalability. Over the past year, we have seen several companies engaging in product developments, partnerships, and M&As to address these concerns through new materials, printers, and manufacturing techniques. Given the importance of metals in several industries (steel is reportedly the second-most consumed raw material in the world), it is likely that this trend will continue and we see more metal-AM developments and capacity expansions.
    • AM demand in defense and funding from military organizations to continue: We saw several US government organizations investing in defense-based AM solutions consistently throughout the past year. For instance, institutions like OSD (R&E) and OSD ManTech have funded multiple AM projects over the past year. Moreover, disruptors such as JuggerBot 3D, 6k Additive, and Materion Corp have received funding from military-affiliated organizations. Meanwhile, companies such as 3YOURMIND, AML3D, NUBURU, and Velo3D entered partnerships and/or met compliance requirements to offer defense-related AM solutions. Continuing this trend should benefit players developing defense-based AM solutions by enabling them to access funding and expand their operations. 

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