When the ARK Space Exploration ETF (ARKX) debuted in late March, some critics pondered the inclusion of the ARK 3D Printing ETF (CBOE: PRNT) among the space exchange traded fund’s top holdings.
These days, the 3D printing fund is the second-largest holding in ARKX at a weight of 6.69%, as of June 18, according to ARK data. the inclusion is no gimmick. The aerospace industry was an early adopter of 3D printing/additive manufacturing (AM) technologies.
That relationship could take a new turn given the coronavirus pandemic. As has been the case with an array of supply chain-intensive industries, aerospace has been hamstrung by the global health crises.
“To better prepare the business for recovery, aerospace manufacturers and suppliers have turned to digital technologies, with AM among them, to shorten lead times, improve fuel efficiency and increase the overall sustainability of air travel,” reports Autonomous Manufacturing. “While AM is nothing new to aerospace companies, it is only recently that the technology has become advanced enough to be used in functional aerospace applications.”
Big Runway for 3D Printing in Space
3D printing is one of the more mature disruptive technologies. In fact, it traces the origins of its initial boom/bust cycle back to 2013. Fortunately for investors, the industry is maturing and stabilizing. Like its younger disruptive counterparts, 3D printing has an array of intersections with other industries.
For example, passenger air travel is an international, but heavily-regulated business, meaning jet manufacturers have a plethora of safety guidelines to comply with before a product can be effectively marketed to airlines. However, different countries have different safety frameworks, and 3D printing can make keeping up with the requirements easier for original equipment manufacturers (OEMs).
“The exact requirements equally apply to additively manufactured parts. While standards and regulations for 3D printing in aerospace are gradually developed, there is an ongoing challenge for aerospace companies in setting up the workflow that facilitates compliance and audit control,” according to Autonomous Manufacturing.
That could be an indication that there’s more room for 3D printing companies to collaborate with and win business from aerospace and defense firms.
PRNT’s place in ARKX is cemented by the ETF allocating approximately 13% of its weight to Lockheed Martin (LMT), Spirit Aerosystems (SPR), Boeing (BA), Airbus (AIR), and Honeywell (HON).
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.