Nano Dimension CEO Gives Company Update
Dan Feinberg and Nolan Johnson speak with Amit Dror, CEO of Nano Dimension, about recent company events and the company’s focus on high-mix/low-volume and agile local manufacturing.
Nolan Johnson: Amit, Nano Dimension has been quite busy recently. Can you start by sharing a review of the news that you’ve been posting in the last 90 days and what general trends you see at Nano Dimension moving forward?
Amit Dror: As you know, we’ve been working hard to come up with a product that brings this disruptive technology to the market, and it took us a few years. Over the last year and a half since we launched the DragonFly printer to the market, we received a lot of feedback. Much of our news is related to the adoption of different silos or segments within the market of electronics. Other news is on our success to penetrate new and different geographical areas, including sales in the U.S. and Japan.
Another trend we’ve presented is how Nano Dimension—in some cases, together with our partners and customers—comes up with new types of applications. Looking at the early days, it was more about PCB prototyping. But as we continue to evolve, we are getting more and more use cases, which we considered as different technologies or unique applications that can be achieved with 3D printing for electronics.
Presenting side mounts on PCB in an easy implementation for our unique technology as well as 3D-printed RF antennas and capacitors. It was nice to see our customer in Japan, which has been the capital of electronics for many years, sharing his 3D-printed applications in Tokyo. It says a lot about the level we’ve reached and the readiness and the willingness of customers to adopt this new type of technology.
Dan Feinberg: Looking at the units that you’ve sold, have any companies bought a second unit yet?
Dror: Yes. TTM Technologies already bought three units. That came after they participated in a pilot stage two years ago with a preliminary Beta system. Today, they have three DragonFly Pro systems.
Feinberg: That’s important because that means it’s part of their production now and what they do every day. When they only have one unit, they could be trying it, but we don’t know how much they’re using it. But when they get another, you know they have justified its use.
One reason I asked that is because I receive hundreds requests from circuit board manufacturers China every day on my LinkedIn account. They always ask if I recommend anyone who needs or makes circuit boards. Then, I ask, “Are you capable of making 3D-printed circuits? And if so, which kind of printer do you use?” I’m not telling them if I’m interested in buying circuits or anything else, but they usually respond, “We can make prototypes quickly, even in half a day, and we don’t need the 3D printer.” I write back, “That’s the only thing I’m interested in, but for more reasons than speed.”
I’ve had a few lately that have said that they are now interested in and are looking at 3D printing. To me, it’s not just a way of making prototypes; it’s a way to make something totally different that you can’t do with standard processes, which is why I ask.
Also, how are your consumable sales doing? That’s a good indication of whether the technology is starting to take off.
Dror: Without getting into numbers, which we share on a quarterly basis since we are a public company, it’s growing from one quarter to the other because the installed base of machines is growing. We’re selling machines, and there were some customers that acquired more than one system. The usage by most of our customers is one of two types: PCB prototyping, in which it depends on how close that customer is to a PCB factory in a way, or how fast could they interact with the factory, which you probably know is also a combination of the complexity the boards are creating. The more complex the board is, the longer it normally takes, and the more expensive it is to prototype it. That would be one usage of the DragonFly system.
Another usage is the one that you commented about, which is making new types of applications that are more difficult, and in some cases, almost impossible to manufacture by traditional means. Sometimes, they don’t even have to be that complex and are still difficult to manufacture. I’ll give you a few examples. Multilayer PCBs are something that traditional manufacturing can make easily. If I want to add an antenna to that PCB, you could manufacture an antenna and assemble it out on top of the PCB or 3D print it all at once with the PCB as part of the 3D print. If you also wanted to add a partial 3D form that could have a battery somewhat embedded, in 3D printing, you could create the battery placeholder as a part of the print and have the antenna and PCB with the battery. Now, we’re starting to move forward toward something more complex. And I just used elements that you could make in a traditional way. However, combining them within the same print increases the complexity significantly. High complexity is a big advantage for 3D printing over traditional manufacturing. None of the things I mentioned are big issues for 3D printing technology.
Feinberg: It increases the complexity, but it reduces the size. It also makes it part of the device itself instead of an add-on component.
Dror: Exactly. That’s another key strength when talking about a premium application, like the one we developed together with Harris Corporation. We’ve been funded now for the second time by Space Florida for an innovative 3D-printed RF amplifier that is designed by Harris and is targeted for nanosatellites. Harris found a way to use Nano Dimension’s technology and materials to reduce the size and weight of RF amplifiers in a way that is worth potentially hundreds of thousands of dollars per satellite. Satellites are expensive, and if we’re talking about nanosatellites, then weight and size are measured in an even smaller scale. Thus, being able to utilize our flexibility in design to reduce the size and weight makes a big difference. By the end of the day, the real cost in 3D is the cost of materials, which is significantly lower in this case compared with the cost of setup and work by traditional manufacturing for such complex devices.
I use that as an example of a premium type of application that can be achieved with 3D-printed electronics. Also, with consumer products, you can get to lower costs when the complexity is high, and the number of units you need to manufacture is not that high; for example, an IoT device for medical devices that combines a few elements and is small in dimensions. Imagine a small, round, cup-like device with an eight-millimeter diameter and three millimeters in height. It has a coil wrapped around it, which is 3D printed, and in the center, you could fit in a very small battery. In the bottom of it, you have the flats conductive area that serves as an antenna for the device. If you were able to follow my description, I created a small device that has a certain shape. When 3D printed, you don’t need a mold to create it. Instead of a PCB, it simply has the conductive coil. For a medical device that might need to be manufactured in the thousands per year, you save a lot cost. With the purchasing, integrating, and testing of such a device, the overhead itself could cost you a lot of money, which can be saved when you 3D print it.
Feinberg: You mentioned you are a public company. And by the way, I did disclose about a year and a half ago that I was a stockholder, and I still am as of today. Just as you have to be careful when you’re talking about a public company, so do I, so I fully understand. Your company announced that it needed additional financing a few months ago, and I think you raised that funding. All companies have a break-even point, and your company has been growing. Are you getting near to achieving your break-even point?
Dror: The company’s focus is on growth and sales. We have reached the point in which our technology has matured into a product that is accepted by the markets, and we are operating in a market that we see as sort of a blue ocean. Meanwhile, the adoption by customers takes time because the pricing points on the product, which is measured at hundreds of thousands of dollars for each customer, makes it a capital equipment expense. It’s not just a one-person decision. The growth curve takes time. We work on transforming our customers from prototyping into manufacturing. And because it’s difficult at this stage to say, “When the time comes they’re all going to make this move, and we’re going to start having customers buy instead of one, two, 10, or 20 of our systems.” That’s the inflection point when the technology makes this transformation from prototyping to production.
Feinberg: So, you’re seeing the increases in the prototyping and the improvement in the prototyping, and being able to develop and manufacture devices, such as the one you described for us. Now, are you moving toward the higher volume manufacturing for these other devices?
Dror: Yes. I would not call it mass high-volume production; it’s more high-mix, low-volume production. If you think of additive manufacturing in the world of 3D printing, most of the other players that deal with different types of materials for the mechanical type of manufacturing are normally measuring their success in the weights or costs of materials. With our customers in the world of electronics, it’s not about how big the application is but about how complex it is. If you have a standard PCB with two layers, but it’s a large one—such as 6 x 6 inches—and then you take a 0.5 x 0.5 inch of an eight-layer PCB that has a couple of complex vias, the smaller one that’s more complex costs more.
And that’s what we’re targeting. The focus of Nano Dimension is on working with our strategic customers. We have different types of customers and partners, such as research institutes, that are great at developing applications. We have various defense agencies in the U.S. interested in prototyping. Then, we have Fortune 500 PCB manufacturers and other large corporates. We could differentiate the ones that are interested in finding those applications that could take them to production, and we consider them as strategic partners and customers. We have our own application engineers that work with our customers to help them to make that transition and take that extra step toward manufacturing.
If you review the enhancements we’ve made over the past few months, you’ll see how many are related to interesting applications that could be achieved almost by 3D printing. The key is to provide the customers with solid, tested, and benchmarked applications that provide them ROI. Our focus is on moving to high-mix, low-volume production of additive 3D-printed electronics.
Feinberg: DragonFly is the main product that you have. It’s clearly the dominant product. Are you working on other products?
Dror: Yes, within the DragonFly family, there are going to be some new announcements. I can’t share more details yet, but stay tuned.
Feinberg: On the financial side right now, globally, we’re in a little bit of a trade war. And there are a lot of tariffs being thrown up between the United States, China, and even Mexico. Are you finding the tariffs affecting you in any way?
Dror: No. The tariffs do not affect us right now. To remind you, we are an Israeli company. Another important perspective of things is that what we’re doing is providing a tool for people to create things. You could say that companies that provide tools, like Dell or Microsoft, provide tools worldwide. Nano Dimension sees itself in a similar way—as a company that provides this tool that happens to be a 3D printer that can 3D print whatever you wish to design. We’re not being affected, and I hope it stays that way.
Feinberg: Your company is growing, you’re approaching the break-even point, and you can’t talk about it in more detail, which I understand. Let me speak then as someone who follows your finances. I’m surprised that your stock has stayed where it is when there have been so many good announcements. As somebody who follows your stock, I view it from two sides: I look at all of the announcements and press releases, and then I look at the stock price, and I say, “What is going on here?” Can you comment about that at all?
Dror: While customers and the public are excited and interested in Nano Dimension’s technology, there is also a concern related to the operational expenses. On the one hand, you could consider the company as a startup with very innovative technology. On the other hand, it needs to deal with a variety of activities related to manufacturing, sales, nanomaterials, software, and machines, which require funding. The company is still building up its markets, and prior to a revenue level that proves it is in a financial break-even, there seems to be an impact on the stock. The company is focused on increasing its growth, and I believe that once it presents a ramp-up in sales, the growth will also be reflected by the trust of shareholders and the stock price.
Feinberg: One of the things that we’re trying to get through to our readers is that not only is Nano Dimension seeming to be leading the parade toward 3D printing for a significant or a reasonable segment of the circuit board fabrication industry, but it’s going to change a lot of things. There are many things that 3D printing does that people don’t realize. It’s not a way to make a quick circuit board. The circuit board becomes part of the structure of the device when you can do it this way. And when we’re talking now about 5G-enabled devices, they’re going to be able to do so much more and are going to be part of the IoT and are going to be part of wearables. Having circuitry as part of the structure of the device allows it to do more things. It allows more components and more capability to be installed in the design of the device.
Dror: It’s even a part of a greater ecosystem. You touched a few applications that can be achieved, whether it’s the actual sensors, the antennas, and of course, the multilayer PCB. But it’s also about the transformers that you can achieve and the ability to take the manufacturing method—which is 3D printing—and embed that as part of the Industry 4.0 approach that comes to support distributed manufacturing and customization of products for consumers. All of these things are happening. There are different elements and technologies, and I’m also talking about the bigger picture of artificial intelligence, Industry 4.0, and smart, agile manufacturing facilities. All of them have a lot to do with advanced electronics as part of the product being manufactured, and the need for additive manufacturing is obvious.
I agree with everything that you said and that it’s not about these specific institutes that we see right now, but about the greater ecosystem that is growing. And we’ll see more and more of it. We already see it in different consumer products. And like you said, most people don’t fully understand yet the 5G era that is coming, that everything is going to be connected and customizable. It’s going to be difficult to achieve all of those innovative changes without using additive manufacturing as a part of this transformation.
Feinberg: With 5G, we’re looking at much higher frequencies, and we may need some additional transmission power to increase penetration. And 5G is coming quickly, especially the various applications of 5G, which is so much more than voice communication. As you see 5G coming, how do you see it affecting the advance of 3D fabrication for circuits? What do you think the effect of 5G is going to be regarding the need for, or the advantages of, 3D printing?
Dror: The impact is going to be huge, and the reason is the numbers. Looking at what happened over the last five years and the expectation for the coming five years regarding the number of new connected devices, we’re talking about more and more billions every year of connected devices. Combine that trend, which is already here, with the fact that devices would need to be more customized because of the consumer trends. People want things to be more customized, and they want to get them faster.
There are going to be so many new products that and many of them customized that would not go to mass production, but to low-volume manufacturing. If you have billions of new products, not all of them end up becoming the next iPhone where you need millions of them every year. Many customers need to have products manufactured at quantities of a few thousand, and they still have to be manufactured fast. I believe that the need for agile local manufacturing of connected devices is going to significantly increase, and the numbers support it. Our timing with this solution of additive manufacturing of electronics is great. And as we continue to come up with new applications as well as improve and mature the product, I trust that we’d be able to maintain our position as leaders in this field of 3D-printed electronics.
Feinberg: I recently came back from the AWE show in Santa Clara, California. I’ve been involved with augmented reality, virtual reality, and mixed reality for a while, which we now call extended reality (XR) to capture it all simply. But in talking with a lot of the headset manufacturers, we’ve gone from headsets that are big, bulky, uncomfortable, and require a lot of power to a number of devices that are not much heavier than a big set of eyeglasses. Its sound, vision, 3D vision, eye tracking, etc., are built into a light headset. To me, the ideal technology for manufacturing these things is 3D printing. Is that something you have considered?
Dror: It is, and from a technology perspective, I put that in the same category with medical devices, such as smart inhalers that require all kinds of electronics inside and special earbuds for hearing devices for people with special needs. Being a pioneer in the field also holds the responsibility to deal with education, and that is a task that takes time. But 3D-printed electronics are already here, and the world is becoming more exciting every day with additive manufacturing taking its place while gradually replacing the traditional manufacturing industry.
Johnson: Thank you so much for your time, Amit.
Feinberg: Yes, thank you. I could probably go on for another hour with questions (laughs).
Dror: Thank you very much.