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* Q3 earnings per share view $0.22 -- Thomson Reuters I/B/E/S
* Aerospace firms investing in additive layer manufacturing
* Attracted by time savings, less waste, design flexibility
* Safety rules mean could be years before technology common
By Victoria Bryan
FARNBOROUGH, England, July 17 The prospect of huge time savings, less waste and more design options have drawn aerospace firms to invest in additive layer manufacturing, also known as 3D printing, though it may be years before parts made this way are common in planes and weapons.
In 3D printing, components are made by building up layers of titanium or other raw materials using computer-driven machines, compared with traditional casting which involves taking a piece of material and cutting away to create the desired part.
The new technology has found a use in a wide range of industries, from designing shoes to dental technology, because it means complex prototypes and products can be shaped much more quickly and with much less wastage of expensive materials.
Analysts predict rapid growth over the next decade, which could boost the shares of companies that make the printing machines, such as 3D Systems, Stratasys, ExOne , Voxeljet, Arcam and SLM Solutions . Another big company in the sector is EOS of Germany.
A McKinsey report this year estimated 3D printing could have an economic impact of up to $550 billion a year by 2025, mainly from consumer uses and manufacturing.
The technology is expected to have far-reaching consequences for the aerospace industry too, and especially the maintenance repair and overhaul business, because it reduces the time and effort needed to produce parts or find spare parts. Because 3D parts are often lighter, the process could also have a profound impact on the way aircraft and satellites are designed.
Aerospace and defence companies such as Airbus, Lockheed Martin, GE, Pratt & Whitney, GKN and BAE Systems are all investing in the technology, with BAE executives calling it "game-changing" at the Farnborough Airshow this week.
GE Aviation announced plans to invest $50 million in its own additive facility in Alabama this week, while GKN said it was leading a consortium in a 13.4 million pound ($22.9 million) additive manufacturing research project.
In some cases, the technology is already being tried out.
The U.S. Navy, for example, is experimenting with 3D printers that could go aboard its aircraft carriers to print out replacement parts on site instead of waiting days or weeks for parts to be found and delivered.
Lockheed's space business, meanwhile, has a 3D part flying on a NASA spacecraft called Juno that was launched in 2011, and is working with the U.S. Air Force to qualify parts that could be used on military satellites in the future.
Still, industry watchers caution it will be a while before the technology will be in widespread use.
"I think you'll see it start to come through," said Glynn Bellamy, KPMG's UK head of aerospace and defence. "But you don't change the design or specification of an engine until it comes up to its next natural point, the next derivative or upgrade, which will take time."
GKN is looking at projects in its aerospace business and its metallurgy unit for the powders that form the basis of the process, but says it will take a while to generate profits.
"It could be very important to GKN but it's a long way off. It's 10 years at least before it's important," Chief Executive Nigel Stein told Reuters at the air show.
While widely used in prototyping, it's mostly only small, non-critical parts such as brackets for Airbus's new A350 jet, hooks, or camera stands for fighter jets, that have been manufactured so far using the process.
That's mainly due to stringent safety testing in the industry, where new technological innovations or even getting the use of mobile phones approved on flights can take years.
"It's great for prototyping, but when it comes to production, it has to earn its way," said David Joyce, CEO of GE Aviation. GE has said it can use the technology to create a prototype for a traditional turbine blade in two weeks, compared with 36 weeks for traditional manufacturing methods.
Before the technology can be used in structural parts onboard planes, companies first need to create a database to provide information on the properties of the materials used.
"We need to prove to the authorities that, especially for load-carrying parts, they can fulfil the requirements," said Sebastien Remy, head of innovation works at Airbus.
Michael Minall, a director at supply chain consultants Vendigital, said using the technology to create spare parts first was one way of gaining acceptance.
"Being able to replace parts such as seat buckles and door handles without massive lead times is really interesting. If you can win hearts and minds that way, then you can move onto structural applications," he said.
The technology opens new design possibilities too.
"Where we drill a hole in a part for the cooling air to run through, today we're limited by a straight hole," said Allen Paxson, executive vice president at engine maker CFM.
"Additive manufacturing allows you to drill a hole to be any shape you want. It could even be a corkscrew."
CFM, a joint venture between GE and Safran, is taking the technology a step further and giving it a tougher test. The fuel nozzles on its new LEAP engine, due to enter into service in 2016, are made using a 3D printing process and GE is investing $50 million into an additive facility in Alabama.
BAE Systems, which has used 3D printed plastic parts as protective covers for items such as radio and shafts on the UK's fleet of ageing Tornado fighter jets, is working with Cranfield university on a much larger metallic part - a 1.2 metre long titanium component known as a spar.
The piece takes 37 hours to produce, compared with around 12-18 months previously, BAE said. It hopes the technology will be ready to move out of the research phase within 2.5-3 years.
"It's a real game changer for us with the time," Michael Murray, head of airframe integration at BAE, said.
Shortening time and reducing costs were especially important now the company can no longer rely on big contracts from the UK government due to a squeeze in defence budgets, but instead has to go out and fight for smaller export contracts.
Analysts at Commerzbank expect the market for metal-based 3D printing systems to grow in the ballpark of 30-40 percent annually between 2013 and 2016 as more and more applications move from the research to production stage.
"It's a unique moment in time for the additive industry, for the aviation industry as a whole," said Greg Morris, in charge of additive technologies at GE Aviation.
($1 = 0.5846 British Pounds) (Additional reporting by Andrea Shalal; Editing by Mark Potter)
* Q3 earnings per share view $0.22 -- Thomson Reuters I/B/E/S
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