Korean government's 3D printing blueprint targets 15 percent of global market
For South Korea, the first half of 2014 showed both the potential and limits of its export-driven ICT business model. The country exported a record $83.83 billion-worth of tech goods — mainly semiconductors and handsets — in the period.
On the other hand, as shown in Samsung Electronics' unexpected profit drop of 24.5 percent for the second quarter, that same strength is showing sign of waning, as competition from lower-cost competitors — especially China — is increasing at an unprecedented pace, threatening the dominance of national brands such as LG and Pantech.
Aware of these challenges, Korea's Ministry of Science, ICT and Future Planning (MSIF) is looking for the next growth engines to sustain the country's momentum. Together with the Ministry of Trade, Industry and Energy, it has announced a forthcoming 10-year plan to support the development of 3D printing.
Will 3D printing become the timely catalyst the nation's manufacturing sector needs to create new value and take Korea's tech business to the next level in the world stage? Or is the new plan by the ministry destined to die out like many other heralded so-called "future growth engines" that the government has promoted?
The unfinished blueprint
MSIF is still to finalize the roadmap, which is slated for completion in October this year, but it has released snippets of what to expect when the plan is officially released.
In the first five years of the plan, the government says it will aim to substantially increase the country's automobile, medical and electronics sectors' demand for 3D printers. However, it hasn't yet explained how it specifically plans to increase demand, or how much it may invest to do so.
After the first five years, the government will examine prospects for the worldwide 3D printing market, which seems to mean that it will play more of a supporting role after the industry grows to a self-sustaining size. The government says the target date for this change in emphasis is around 2019.
South Korea plans to help 10 million people become skilled at using 3D printers — a fifth of the population — by 2020, and increase the nation's global 3D printing market share to 15 percent in the same timeframe.
The Seoul government will also supply 5,800 3D printers to 5,865 schools nationwide by 2017, and will educate 13,000 teachers so they have a better understanding of 3D printing and can pass that on to their pupils. Around the country, 130 3D printing promotion centers will be built to spark interest in the technology.
Three words sum up the problems the government is trying to address here: 'demand', 'awareness' and 'education'.
To start from scratch…
"Currently, we lack a 3D printing industry infrastructure compared with other parts of the world," said Park Choon-won, an official at the ministry, stating a somewhat obvious truth.
3D printers themselves are not new to Korea: manufacturer Instec introduced its first product back in 2001, right after the dot-com bubble. The problem is the technology has been treated more as interesting eye candy then a serious business.
"In previous years, 3D printing in South Korea was a limited industry," said Moon Kyung-joon, an analyst at IM Investments & Securities. "It only focused on demonstrating devices at exhibitions."
As of June 2014, according to the National IT Industry Promotion Agency, 17 local companies are making 3D printers. These are all small to mid-sized firms. Two of them make 3D printers for industrial use, while the other 15 make personal printers. Not very impressive, to say the least: Samsung Group has more subsidiaries than that in total and any one of them could buy all 17 companies without breaking sweat.
"Differing industries need to create a network that shares their usage of 3D printing to create synergy."
"The Ministry of Science, ICT and Future Planning's priority in producing a concrete 10-year roadmap should be solving the low demand," says Moon. Despite the low interest, the analyst said that a 3D printer sales channel has developed, and the industry has advanced dramatically compared to 10 years ago.
"The biggest problem is there is minimal demand from large companies and individuals. One of the biggest barriers is price, and lack of software that designers can apply for using 3D printers," Moon added. Only one company, Intelli Korea, develops software for 3D printers.
Different industries have shown differing levels of interest. Asked by ZDNet Korea whether they had any plan to enter the 3D printing business anytime soon, officials at Samsung Electronics and LG Electronics both answered "absolutely none". However, the two companies are known to use 3D printers in some of their facilities, although whether they are used in factories that produce commercial products, or in labs, is unknown.
By contrast, the chaebol — Korea's term for a family-owned conglomerate — that has shown the strongest interest in adopting 3D printers is Hyundai Motor Group, the nation's automobile giant. Hyundai MOBIS, the group's car parts maker, was the first company to start using 3D printers, in 2002.
"We have three 3D printers at the research center in Yongin, south of Seoul. These printers produce prototype models of automobiles," said a Hyundai MOBIS spokesman.
"We made more than 3,000 prototypes using 3D printers in the year 2012. That's a 49 percent increase from the year 2011," Hyundai's spokesman added. Hyundai MOBIS in now in a partnership with Stratasys, the world's number-one 3D printer maker, and seems ready to boost usage.
The government says it will address different industries specifically. "The 10-year roadmap will be separated into individual plans that address the equipment, material, software, and service applications industry for long-term support," says the ministry's Park. "Our support plan will be specific when unveiled in October, and will show a plan for the short, mid, and long-term during the next ten years."
Promoting awareness and education
Since the government's announcement, local business industry associations are gearing up to increase promotion of 3D printing. As of July, four associations have formed to promote usage.
One is the 3D Printing Association, freshly established on 30 June this year. SK Telecom, Samsung, Rockit and other 3D printing companies have joined, with more expected.
"We welcome the Ministry of Science, ICT and Future Planning's expected 10-year roadmap for 3D printing," says Byun Jae-woan, the chairman of the association, and Chief Technology Officer (CTO) of SK Telecom. "3D printing has a disruptive potential and is essential in forming a creative economy."
"I hope the government plays the role of an incubator that offers systematic and active support, that it will oversee the whole industry and create worldwide market leaders," says Byun. He says an infrastructure is needed so the local industry can absorb new technology created abroad as soon as possible.
"Differing industries need to create a network that shares their usage of 3D printing to create synergy," he said.
Another SK Telecom official, who declined to be named, said it was very difficult to expand in the 3D printing business alone. "We want increased cooperation from associations and their members. I think that is the most important thing."
Another association, the 3D Printing Industrial Association, a group established in 2013 and registered to the Ministry of Trade, Industry & Energy, boasts 180 members. The association thinks the government's recent announcement will increase membership.
In academia, more and more universities are using 3D printers in classes. Ahn Sung-hoon, a professor at Seoul National University, uses 3D printers at the campus's Innovative Design and Integrated Manufacturing Laboratory. Students use these to make creative designs and see results first-hand. At Seoul's Chung-Ang University professor Choi Young is using 3D printing for a construction class.
"I think the government is right to take a bottom-up approach where 3D printers are used from elementary schools all the way up to universities," said the SK Telecom official.
Companies are also keen to promote 3D printing usage. Sindoh, a local copier maker with a 54-year pedigree, has been running classes for beginners since November last year, and says more than fifty people participate in each. It also promotes its self-developed 3D printer called Cube, weighing a mere 590g, to show how accessible these machines really are.
Where to?
"The outlook for the local 3D printer industry is positive. The government's 10-year roadmap, I think, will greatly boost the industry," says Im Sang-kook, an analyst at Hyundai Securities.
"The companies securing funds from the government will be the pivot point in which the 3D printing businesses expand in the future. It's too early to determine how much the expansion of the 3D printing industry will affect the daily lives of consumers, but I think there is a global trend where multinational companies are increasing their 3D printing competence, and it is important for Korea to take part in that."
Korea has been what some people call a 'fast follower' throughout its spectacular growth in the last decade.
Despite the impressive numbers shown in its export numbers, it now has to demonstrate it can fend off rapidly developing economies in all manner of technology sectors, and especially in 3D.
Korea needs to produce value-added, creative and original products that beat what comes out of China, India, and South American economies that are growing rapidly from the same business model Korea benefited from — low costs and cheap products. That will determine whether it is truly capable of staying ahead of the competition.
The government and chaebols are showing signs of backing down on solar and biomedical technologies that were considered just a few years back to be the next growth engines for the country. 3D printing comes at a time when the nation is looking for something else, and attention towards it seems only ready to grow more.
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Lee Byung-kuk, CEO of CARIMA, a local 3D printer manufacturer, told ZDNet Korea "The first thing for government to do is to support the companies who've been concentrating on making 3D printers for more than a year"
"We have a experienced workforce that can make reliable and sustainable 3D printers. We hope government will have much more interest in us and other companies."
According to 3D printing analyst Wohlers Associates, South Korea's market share of worldwide 3D printing is 2 percent. That's far behind the US (77 percent), Germany (11 percent), and Japan (3.7 percent). The US, the world's leading 3D printing nation, has more than 1,800 patents. Wohlers expects this year's 3D printing market to be worth $2.8 billion.
Meanwhile, US market research firm MarketsandMarkets, in its July report, expects the worldwide 3D printing market to climb to $8.41 billion by the year 2020.
It says: "The major driving factors for 3D printing are simplifying manufacturing of low volume production of complex geometry components, and rapid manufacturing of customized products with regards to various applications such as aerospace.”
Korea has all the right components to become successful in 3D printing but it has to avoid previous miscalculations in solar and biomedical technologies.
By Cho Mu-hyun & Jaehwan Cho, ZDNet Korea