Stratasys Debuts a New 3D Printing Technology, Layered Powder Metallurgy

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This week Stratasys unveiled its first metal 3D printing technology, layered powder metallurgy (LPM). LPM is a process of dispensing metal powder, spreading it evenly onto a layer, pressing it, and then using proprietary thermal ink to etch the part into each layer. Pressing the powder prevents the shrinkage that other metal 3D printing technologies like laser sintering are causing. LPM will address short-run production applications, with auto companies particularly interested as Stratasys hopes to cut their costs by 80%.

Stratasys plans to focus first on aluminum with off-the-shelf powders that cost roughly $5 per kg, one tenth that of specialty powders.^[1] By contrast, its base business in plastic 3D printing uses proprietary materials. In the metal 3D printing space, an off-the-shelf strategy makes more sense because, unlike with plastic inputs, swapping among powders is much easier.

In early stages of development, metal is the fastest growing segment of the 3D printing market. This week we learned that BMW and Volkswagen are using HP’s Multi Jet Fusion technology, and that Volkswagen plans to 3D print tools for the T-Cross SUV. Meanwhile, Volvo may be testing LPM, as it already is using Stratasys’s Polyjet technology which has cut tooling costs by up to 92%.

[1] Source: Meeting with Stratasys IR

The Price of Electric Vehicles Will Decline for the Next 10-15 Years

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Battery costs, the primary determinant of electric vehicle (EV) prices, have dropped so much that EVs are closing in on price parity with gas-powered vehicles. As shown below, ARK’s research suggests that the price of an EV with a 200 mile range will be competitive on a like-for-like basis with gas-powered cars by the early 2020s.

We believe often overlooked in this comparison, however, is that battery costs will continue to decline for years as transportation shifts from the internal combustion engine to the electric grid. According to ARK’s research, EVs in the US should be competitive with gas-powered cars at every price point by 2025.  As a result, the global demand for EVs should soar more than ten-fold from fewer than 2 million this year to 27 million, accounting for roughly a third of auto sales, by 2025.

Source: ARK Investment Management LLC

The IMF Outlines Its Peculiar Assessment of Cryptocurrencies

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Christine Lagarde, Chair of the International Monetary Fund (IMF), detailed the case for central bank digital currencies (CBDC) at a Singapore Fintech conference earlier this week.

In her speech, Lagarde evaluated the role that central banks will play in the evolving financial landscape. One option will be a central bank digital currency (CBDC), "a state-backed token, or perhaps an account held directly at the central bank, available to people and firms for retail payments.” At the highest level, a CBDC would be digital money issued by a central bank to serve as legal tender, similar to cash, primarily for retail payments.

Lagarde delivered her speech two days after the IMF released a research paper highlighting many of the points she made. Providing some context and perspective from that paper is the table on page 39, delineating the IMF's view on various forms of money compared to potential CBDCs.

Most interesting to us is the IMF’s inaccurate representation or misunderstanding of cryptocurrencies. In particular, its assessments of "scalability", "theft and loss risk", "transaction costs", and "anonymity costs" seem misplaced. On scalability, Bitcoin's base layer is a settlement layer for large value transactions, as opposed to the IMF’s suggestion that it is unsuitable for large payments. On anonymity, Bitcoin transactions are pseudonymous and transparent, not anonymous.  Finally, on transaction costs, while the IMF suggests that the demand for energy will scale with the number of transactions, the fact is that the energy necessary to secure the network is independent of the number of transactions the network can support.

While the report conveys that central banks are grappling with changes in the financial landscape, ARK believes that the IMF must be more open-minded about the contenders for “money” before proposing a solution.

Nvidia Expands from Deep Learning to Mass Market Machine Learning with RAPIDS 

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While the financial community fixated on excess inventory of graphic processing units (GPUs) after Nvidia reported weak third quarter sales, we believe that its announcement of RAPIDS—a GPU framework for machine learning—was far more interesting and will be much more impactful long term.

Nvidia pioneered the concept of using GPUs to accelerate deep learning applications, now a $3+ billion business. Deep learning, however, makes up only a fraction of the machine learning market, which includes dozens of different algorithms and software frameworks. While leading edge internet firms use deep learning and neural networks, for example, most large enterprises use some variant of Hadoop for data analytics.

Nvidia’s RAPIDS framework brings the power of GPU acceleration to common machine learning and data analytics frameworks today. Unlike its foray into deep learning, where it created the market from scratch, Nvidia launched RAPIDS which taps into the large and growing market for analytics. With Moore’s Law grinding to a halt, we believe Nvidia’s move could not be more timely.

The Sequence of a Novel Mosquito Genome Paves the Way to Preventing Disease and Deaths

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In October, thanks to its long read-length technology, Pacific Biosciences sequenced one of the most complete human genomes in history. That sequence clarified much about the structural variants found within human DNA, pointing to potential improvements in the design of molecular diagnostics and therapeutics.

Whole genome sequencing on long-read instruments also is impacting the animal kingdom. A recent publication in Nature showcased the most complete reference genome for Aedes aegypti, a mosquito with a high frequency of structural DNA variants that infects more than 400 million people each year with viral pathogens including Dengue, Yellow Fever, and Zika. Thanks to this open source reference mosquito genome, researchers will be able to create better repellants and treatments for viral pathogens transmitted by mosquitos.   

Based on Pacific Biosciences’ long-read platform, this study surfaced several regions of the mosquito genome that survive insecticides and transmit viruses. An increased copy number variation within genes coding for the glutathione S-transferase enzyme, for example, enables a mosquito to repel certain chemicals. With this knowledge, researchers should be able to reengineer insecticides.