Advanced Manufacturing (Q3 2023): Partnerships drive activity despite funding dip

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 July 2023 through September 2023 (Q3 2023).

Key takeaways

Funding

Q3 volumes fell significantly for AM and DT, but Mining Tech saw an uptick: The sector saw overall funds raised falling 21.6% YoY to USD 511 million, primarily due to fundraising in the AM industry falling ~67% YoY. Despite the downward trend, Mining Tech saw upticks in investment, with funds raised during Q3 2023 increasing 49.2% YoY to ~USD 189 million. This was primarily driven by exploration and discovery solutions provider Ivanhoe Electric raising USD 160 million during the quarter. Overall, the sector saw a decline in the share of growth rounds (~4% vs. ~15% Q3 2022) in favor of other types of funding (primarily post-IPO debt and equity).

Partnerships

Product partnerships remain the most common; Siemens’ DT adoption in mobility drives customer partnerships: Product partnerships accounted for ~62% of the overall advanced manufacturing partnerships during the quarter. The Digital Twin (DT) industry continues to drive partnerships owing to a mix of product partnerships and Siemens entering mobility-related customer partnerships. The Smart Factory partnerships were led by incumbents entering product partnerships, mainly aimed at improving asset monitoring. Meanwhile, Additive Manufacturing (AM) partnerships were driven by startups entering product partnerships to boost metal AM and SPEE3D entering military sales partnerships.

Product updates

The AM industry drives product updates centered on new printers and materials: Although partnerships were favored in the Smart Factory and DT spaces as a means of product development, we observed that using internal product updates was just as popular in AM. Several companies launched new AM printers and materials, as the industry looks to address constraints of material availability and design accuracy, which plague AM adoption. In addition, Meltio launched a plug-and-play robotic arm to enhance metal 3D printing. Meanwhile, Smart Factory developments during the quarter were aimed at helping users manage heavier workloads and making it easier for them to design manufacturing analytics processes.

M&A

Smart Factory incumbents active in M&A to expand operations and gain exposure to new segments: We counted three major transactions in Q3 2023, with two of them coming from the Smart Factory space. This comprised IFS expanding its industrial IoT offerings and Rockwell Automation broadening its exposure to the autonomous mobile robot (AMR) segment. Meanwhile, in the AM space, we saw only one major acquisition—ADDiTEC acquiring Elem Additive from Xerox to expand its metal AM operations. Meanwhile, Stratasys rejected its landmark merger plans with 3D Systems to explore strategic alternatives.

Regulations

US and UK Governments support research into and adoption of AM: During the quarter, the US Government announced funding for two open project calls for AM developments (relating to developing powder alloys and AM material datasets). Meanwhile, a UK consortium with government support and funding was formed to develop an advanced 3D printing system for manufacturing in Scotland and the UK.

Outlook

Partnerships and product developments likely to continue: Across the advanced manufacturing industries, it is likely that we will continue to see new products coming in, either by way of partnerships or in-house developments (product updates). The common themes we have seen throughout the year, which are likely to continue, include: 1) embedding GenAI to solutions, 2) leveraging DT technology to enhance smart factory offerings, and 3) entering sales partnerships for international expansion.
Metal AM developments should continue expanding: Metal 3D printing has been a common theme during the quarter, with several product partnerships, updates, and acquisitions targeted at expanding metal AM solutions for multiple industries (including aerospace and semiconductors). Moreover, the US Government has also supported the same by funding research into powder alloy development and metal AM material dataset research. These initiatives should help the continued development of metal AM solutions.

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