Arcam AB fka AMAVF

[flying_trader]

The Aviation Leg…

I and others were fascinated with HW's Donald Godfrey, he gave a great speak which Tom on this board would have found very interesting as it had a healthy dose of Metallurgy which went a bit over my head…

Poor Don was barely able to get a sandwich down with all the folks asking him questions which he graciously answered, I learned a lot.

One interesting tidbit I picked up from Don was, and perhaps some knew but I didn’t, was that GE has had some trouble with 3D printing the fuel nozzles and they are now just printing the tip with the body being produced in a traditional manner by a joint venture unit between GE and Parker Aviation… apparently they could not reach the technical threshold necessary with Laser 3D printing of the bodies… Much PR notwithstanding…

http://solutions.parker.com/LP=2404#

What this means for GEs appetite for AM I will leave to the reader but I doubt it has emboldened them to move faster in this direction…

I also learned the reason we did not get the other sections of the GE9X LPT, it has to do with the heat levels in those other sections as well as the business case for the using EBM for blades that had to be made of Inconel.

This has ramifications for the number of machines they will need… whereas we were estimating the number to be 90 or 100 it is likely more in the area of 30 of which they have or have ordered 20 so I am not expecting much more out of Avio for some time to come…

Don talked about a part they are going to be making at HW and how it is much faster, cheaper and better to produce it using EBM. He was very bullish and I expect HW will cover our December order needs this year when we cycle the Avio order.

Still, while he thought HW would be in the market for 50 or so units there are limitations on the parts that can be produced commercially with EBM.

EBM at the end of the day is a bulky process and it is not going to be easy to automate away the need to move a build block that is 1,000 degrees into a powder recapture unit and manually clean up the parts.

While Arcam is making progress on reducing the cooling times it is still a labor intensive process to clean and recover the powder. This will make the use of EBM pretty much limited to high end, difficult to produce parts.

I don’t see it being used for thousands of brackets, but maybe that is just my limited foresight I am sure I will get hammered by the cheerleaders for that pov…

Don also mentioned that Avio has drops for 50 machines so perhaps they will order more over the years…

I am also reading between the lines here, but I think RR will be moving that bearing housing into production… I heard nothing official, but got that feeling… so Investor123, I think our annual estimates will be close with HW saving the day with a big order in December, but if we hear from RR that is a signal to double down as they will have a very good year indeed…

Overall I came away with better managed expectations for the growth in Aviation, it will speed up with the FAA, like the FDA, getting more comfortable with the technology and more readily let companies move ahead with more parts… but it will be a slow process…