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In 2020 and 2021, several 3D printing companies went public through mergers with SPACs. At the time, investors were optimistic about 3D printing technology, believing it could revolutionize manufacturing across multiple industries. The primary appeal of 3D printing lay in its potential to significantly reduce lead times, improve production efficiency, and create parts with complex geometries that traditional manufacturing methods could not achieve.

One of the strongest proponents of 3D printing was Cathie Wood’s ARK Invest. In 2016, ARK launched an ETF dedicated to investing in 3D printing stocks. Unfortunately, like many of Cathie Wood’s investment products, this ETF has performed poorly. Since its inception, it has declined by 1% — a seemingly minor drop. However, this decline occurred during a significant bull market when the S&P 500 surged by over 160%. Of the three largest 3D printing companies that went public via SPAC, all have lost more than 95% of their value and now appear close to bankruptcy.

Today, we’ll explore why investors were initially so enthusiastic about 3D printing and why these expectations failed to materialize.

The 3D Printing Hype Cycle

Returning to 3D printing: this chart illustrates the psychology surrounding 3D printing. One of the earliest 3D printing companies, 3D Systems Corp, went public on the New York Stock Exchange in 1988. For over two decades, the company remained a micro-cap, generating minimal revenue due to limited real-world applications. Few investors paid attention to 3D printing until 2012, when the first wave of hype began — what we’ll call the consumer hype cycle.

Around 2012, companies started offering 3D printers that were small enough for home use and priced at a few thousand dollars. These printers worked by heating plastic and extruding it layer by layer to create objects. The idea was that anyone could download designs and print custom objects, prototypes, or spare parts at home. Analysts and media outlets predicted a revolution. For instance, Wired Magazine claimed in 2012 that 3D printers would soon be sold in mainstream stores like Walmart and Costco.

Wall Street quickly embraced this hype. In 2010, 3D Systems’ stock traded around $4 per share; by 2014, it peaked at nearly $100. However, the reality didn’t match expectations. While 3D printers allowed users to download and print designs, the process was complex. The machines were prone to jamming, required frequent maintenance, and were limited to printing with soft plastics. Creating custom designs demanded mastering intricate design software, and the cost of materials was high. In most cases, it was cheaper and more convenient to buy items online than to print them at home.

EPS

As a result, widespread adoption of consumer 3D printers never occurred. Although revenue for 3D Systems increased from $160 million in 2010 to over $600 million in 2014, profitability plummeted. In 2015, the company reported an operating loss and continued to lose money. Competition from low-cost Chinese manufacturers further squeezed profit margins, and 3D Systems’ stock price collapsed, marking the end of the first hype cycle.

The Industrial Hype Cycle

Despite this, Cathie Wood’s ARK Invest saw potential in industrial-grade 3D printing. In 2016, ARK launched an ETF focused on 3D printing for industrial applications. Unlike consumer printers, industrial 3D printers produce complex metal parts for sectors like aerospace and healthcare. For example, General Electric used 3D printing to reduce the number of parts in a turboprop engine from over 800 to just 12, improving efficiency and reducing fuel consumption.

Hype Meets Reality

In 2020 and 2021, three industrial 3D printing companies — Desktop Metal, Velo3D, and Markforged — went public via SPAC mergers, each valued at over $1 billion. ARK invested heavily in these companies, expecting them to benefit from demand for specialized manufacturing. However, these investments proved disastrous, unfortunately, these investments turned into failures, with all three companies losing over 95% of their value. So, what went wrong?

As mentioned earlier, the market for 3D-printed metal parts is highly specialized, catering only to complex components needed in limited quantities. In 2020 and 2021, the companies experienced strong revenue growth, but by 2023, the market was saturated, causing revenues to decline. Just like in the first hype cycle for consumer 3D printers, increased competition drove prices down significantly.

Key aspects of metal 3D printing aren't patent-protected, leading to the emergence of many competitors globally, which further eroded pricing power. Consequently, Desktop Metal, Velo3D, and Markforged have reported mounting operating losses since going public. The poor performance of ARK's 3D printing ETF was so notable that in August 2024, ARK Invest released a video explaining their missteps.

ARK acknowledged that 3D printing technology has primarily benefited its users rather than its suppliers. For instance, companies like SpaceX use Velo3D’s printers to produce rocket engine parts, but SpaceX's business dwarfs that of its supplier in both size and profitability.

ARK speculated that software-enabled 3D printers, capable of gathering and relaying data to improve manufacturing processes (similar to Tesla's over-the-air updates), might give manufacturers more leverage. However, this is unlikely to solve fundamental issues. If Velo3D raises prices too much, SpaceX can simply switch to another supplier.

The core challenge remains that 3D printing caters to niche markets, and the abundance of suppliers prevents sustained profitability. The pattern of overestimating demand and underestimating competition mirrors the consumer 3D printing hype of the early 2010s. In both cases, projections of widespread disruption proved overly optimistic.

While 3D printing does provide value for specialized industries — with companies like SpaceX, GE, and Airbus using it for specific components — its broader adoption remains limited. Growth-focused investors, including Cathie Wood, often overestimate the transformative potential of emerging technologies. So far, those bullish expectations have rarely materialized.

The market for 3D-printed metal parts turned out to be narrow. While revenue initially grew, it plateaued by 2023 as the market became saturated. Additionally, competition increased as more manufacturers entered the space, driving prices down. Since the technology wasn’t patentable, companies like SpaceX could easily switch suppliers if costs rose.

In August 2024, ARK admitted that 3D printing benefited users of the technology more than the manufacturers themselves. Companies like SpaceX leveraged 3D printing effectively, but suppliers struggled with low margins and competition.

Conclusion

In both the consumer and industrial 3D printing hype cycles, expectations far exceeded reality. While 3D printing remains valuable for specialized applications, it hasn’t achieved the widespread disruption that some investors predicted. Growth-focused investors, including Cathie Wood, often overestimate the potential of emerging technologies. So far, these optimistic projections have rarely materialized.

What are your thoughts on 3D printing?