Why 3D Systems Corporation Should Worry About OpenSLS And Formlabs

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3D Systems Corporation (NYSE:DDD) has a huge product portfolio, which gives the company a distinct advantage over rivals. However, the expiration of patents around its key technologies has prompted new competitors to enter the 3D printing market, and offer similar products at lower prices. Its two crucial technologies stereolithography (SLA) and selective laser sintering technology (SLS) have gone off patent.

3D Systems to face a massive influx of new competitors

Expiration of patents around SLS paved way for the open source OpenSLS project led by Andreas Bastian. OpenSLS has created an SLS 3D printer at just $15,000, far lower than the cost of a top-line machine, which could be $500,000-$750,000. Steve Heller of The Motley Fool says that the OpenSLS printer may not be a commercial product today, but its future iterations could put huge pricing pressure on 3D Systems Corporation (NYSE:DDD).

This achievement would encourage OpenSLS project to develop more compelling and cost-effective SLS printers that could rival 3D Systems Corporation (NYSE:DDD). Moreover, expired patents on SLS means new competitors with significant manufacturing expertise would enter the segment. For instance, XYZprinting already has the necessary manufacturing expertise to give 3D Systems a tough fight in the consumer space.

Will Formlabs undercut 3D Systems in the consumer space?

Another startup Formlabs is trying to capitalize on 3D Systems Corporation (NYSE:DDD)’s stereolithography technology, which has gone off patent. It has launched a new Form 1 SLA 3D printer, and demand for this product is so strong that you have to book the product six months in advance if you want to buy one. If you make a purchase today, it won’t be fulfilled for at least six months. A top-of-the-line SLA unit from 3D Systems cost around $100,000, but Form 1 costs $3,299.

If Formlabs can democratize the SLA technology, which has so far been reserved for high cost and high-end machines, 3D Systems Corporation (NYSE:DDD) may have to face a serious challenge. The startup may force the Rock Hill-based company to slash prices down the road. Looking at the history, when Stratasys, Ltd. (NASDAQ:SSYS)’s patents on its fused deposition modeling technology expired, it fueled a huge influx of consumer 3D printers. 3D Systems can expect a similar scenario when new competitors emerge in the SLS and SLA space.

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