World’s First 3D Printing Billionaire: Dr. Hans J. Langer

– [Adam] Welcome to the “AM Voices” podcast on AdditiveManufacturing.com brought to you by Metrix, an ASME company. Metrix provides resources of content, communities, and expertise to educate technology purchase decisions, and forge measurable long-term business relationships. For more information, visit our website metrix-connect.com. This is your host Adam Penna. Our first guest is Dr. Hans J Langer. He’s a humble, hardworking family centric person who also happened to be recognized by Forbes in 2019 as the first 3D printing billionaire. After his humble beginnings doing research in plasma physics and then managing director for Europe at General Scanning, Dr. Langer founded the family owned company EOS in 1989 and built it into the global leader for high end solutions in the field of industrial 3D printing with laser powder bed fusion. I had the opportunity to work for Dr. Langer from 2015 to 2020 and felt both honored and proud to get to know a good hearted, open, and hardworking family man who’s generally passionate about developing 3D printing technology, not just as a prototype solution, but an end part additive manufacturing ecosystem of solutions for both polymer and metal. Help me welcome Dr. Langer…

– [Adam] Hi, welcome everybody. This is the first episode of AM Voices on AdditiveManufacturing.com and I am here today speaking with Dr. Han’s Langer. Hans, welcome.

– [Hans] Well, thank you very much for having me.

– [Adam] Yeah, again, thanks for being here. I have a history with you, obviously, I worked for EOS for five years, a wonderful time over there, but I saw everything from the beginning days in 2015 to where GE was a partner to them becoming competitive. So there’s been a long ride in between then and now, and seeing all the amazing things that’s happened at EOS. So I couldn’t think of anyone, obviously better to talk about additive manufacturing with manufacturing in general than you. So thanks for being here, Hans.

– [Hans] Thank you.

– [Adam] We were talking about things in the beginning of getting started inside of additive manufacturing and you found EOS back in 1989, but before that there was a lot going on and you had to put up with a lot of rejections, a lot of; “no, that’s not gonna work” or, “hey, it’s not time for that” or “you’re spending too much money in one place”, all these things that people come up against in the beginning of getting over the objections that come along with following your passion. Here we are over 30 years later with additive manufacturing and it’s becoming, and it has become a viable manufacturing process. So what was it like getting started back then and when did you first know 3D printing would be a viable manufacturing process?

– [Hans] I mean I got the first idea of 3D printing when I was working for General Scanning. At this point in time, this was the world leader in laser positioning equipment. And I had the opportunity to meet with Chuck Hull, now the founder of 3D systems and he gave us his presentation on 3D printing at this point in time. And we’re purchasing scanners, laser beam moving elements from us. And this is what I saw. And when I saw his device, now the first SLA pre-stage-

– Then I saw thought, this is the big opportunity because building parts layer by layer means a totally new freedom in design. The concern, what I had was with this technology is the goo, as we call it, the material-

– [Adam] Ah, yes the material.

– [Hans] Was just usable for prototype and they said, this is not the serious approach. I mean, we have to take this technology to functional parts. And because I was working for General Scanning, we were supplying the whole laser industry with mirror systems to do marking, to do welding, to do cutting with lasers. So we knew the industrial world and we knew that was coming up here with 3D systems in the first phase was just prototyping equipment. And we saw, if we can take this to a level where we go into functional materials to make functional parts, this would be huge.

– [Adam] Huge.

– [Hans] And this is what I saw. And I proposed it to my shareholders at General Scanning that we should build a new business unit and take this industrial approach, but they refused. They saw a huge patent litigation in this field. And I tried it myself and I got the patent litigation.

– [Adam] Yes.

– [Hans] And we had, by the way litigation over 10 years, 10 years of patent litigation, but the end of the story was we had all the patents, what we needed and therefore it took a lot of energy, it took a lot of money as though we ourselves spent at least 10 million only on this patent disputes and 10 million for a start up having more or less nothing. This was real hard to get through this, but we managed it. And in 2004, patent litigation was over and we were in an excellent position to get on with our ideas on a worldwide basis.

– [Adam] Yeah, you talked about that, excuse me, in the early side that the patent litigation and the importance of you were looking for the production side of the patents.

– [Hans] Correct.

– [Adam] More than the prototype side. So talk a little bit more about that.

– [Hans] Correct, I mean, I was only interested in additive manufacturing as a production technology because we were working with our scanning devices in the environment of production, the really welding, cutting with lasers, and this was our market. And we were not familiar with prototyping markets. Prototyping was yeah, not really of interest. And I think also further movement after we had finished our patent litigation, other companies moved into the consumer business. So in principle, they tried to do 3D printing devices for consumers, personal 3D printing. And this was something we never touched. We said, this is not our world. We are only interested in finally industrial factories, making parts, very specific parts you cannot make any other way. And this is what we did. This was our vision. And this is what we still do.

– [Adam] It is, it is a viable process for production manufacturing and people didn’t quite see it back then that way and you had that vision. So thank you, ’cause we’re sitting on the entire industry right now and there’s a lot going on to be excited about now.

– [Hans] And we are by far not finished.

– [Adam] No.

– [Hans] I mean we are just getting started. What we see is now we see scalable business models as when we really grow into big business opportunities with very specific applications but this is what we can share during the discussion. I mean-

– [Adam] Yeah, and scalable business models, I know are obviously the poster child back in the day was for the GE having that actual fuel nozzle and so that was a big part of EOS proving that you can do this in production system and make something totally unique. So talk about that, ’cause there was a decision back then, I remembered that you made to grow the entire industry rather than develop solutions for one company.

– [Hans] Yeah.

– [Adam] So tell us a little bit more about that timeframe.

– [Hans] Yeah, so it was really the case. So when you think about this fuel nozzle, just to give you an idea, there are more than 100, this is all public knowledge. There are more than 100,000 of these fuel nozzles have been manufactured so far. And this is just one part. And my vision in 2010 was that one, the manufacturing of one part will be more sales than for the total EOS Group. And this has proven to be true and this is still true. I mean, we are today working on a special application where the manufacturing of one specific part will be three times the sales of EOS of today.

– [Adam] Wow, wow. Yeah, that’s amazing. I know that getting into those parts and really being able to look at what’s happening inside a machine, to jump around what we were talking about a little bit before in another conversation, I heard you mention that I believe it was a Todd Grimm interview back at AMUG, you mentioned, the future needs machines that are developed for the application rather than all the application stuffed into the same machine, something like this. Can you expand a little bit more about what you meant about that? ‘Cause I think that’s very important for people to understand.

– [Hans] Here you have to understand from where I’m coming. I mean, I’m coming out of the laser scanning world So moving laser beams, managing laser beams in industrial manufacturing operations. And to tell you the truth, all these manufacturing applications, all the equipment is custom for this specific application. I have not seen any industrial production working with a standard product.

– [Adam] Yeah.

– [Hans] And also the the machines where the fuel nozzles were made on, these were custom machines. It were just optimized for this purpose. And I think this is something one has to understand and most people don’t understand that when you come out of the machine business, then you normally think standard machines and easier to scale, but in additives, this is just not true. I mean, you can be much more cost effective if you optimize the machine or the platform for what you have to do. And this is more or less a big difference because the interesting thing is not what you can do with standard machines, the interesting thing is what you can do with custom machines.

– [Adam] Ah.

– [Hans] And for us in manufacturing, only cost per part counts.

– [Adam] Yep.

– [Hans] So it’s not, what is the machine price, it is just, what is the cost per part? And we are optimizing this permanently and we are in a situation from our technology point of view. And this is not only EOS. I mean, we have built a complete ecosystem and for instance I’m the major shareholder and chairman of Scanlab Group. This is a unit with around 500 people, nearly 200 million in sales and they ship, just to give you an idea, more than 50,000, 50,000 units per year and they go all into kind of machines.

– [Adam] Yep.

– [Hans] Okay, so we support 50,000 machines per year, just with laser based manufacturing applications. And additive is only a small part of this.

– [Adam] it is. And that you talked about that importance of AM production ecosystem.

– [Hans] Yeah.

– [Adam] And you’ve done a lot to define that ecosystem and support that with what’s going on out there. So talk a little bit more about that and how that works on both sides ’cause you’re right, it’s not only about the machine, but it’s what happens before and after that, and you’ve been effectively pushing that forward also. So talk a little bit more about that.

– [Hans] Yeah, and so we are coming from more or less laser positioning and management world, because this is where we do most our business. Now, additive is only a small percentage as it’s less than 10% of the whole business, what we are supporting in manufacturing. Just to give you an idea, when you look at the manufacturing of iPhones at Foxconn-

– [Adam] Yep.

– [Hans] They use more than 15,000 of our units to manufacture iPhones.

– [Adam] Wow, yeah.

– [Hans] And they have 12 different applications what they do and without our technology, no iPhone production is where it is of today. And most people don’t see this. So they think there are standard machine, but only iPhone 4 was manufactured on standard machines. And since then, the machine were more or less modules, as we call the scanning engine. So it’s a core of a machine, but you have not only one machine in such a manufacturing place, you have hundreds and thousands, and therefore you have to connect these scanning engines in a smart way. And this is what I see. And we are working on very specific scanning engines that have a lot of different kind of interfaces as we do today. So we are just creating new standards in this industry because when you look at the full function of these scanning engines, and you have not to only position the laser beam, you have also to manage the laser beam. For instance, it’s a big difference if you have just a Gaussian profile of a laser, what the standard is, or if you make a rectangular profile, this can change the cost per part by a factor of two to three. And this is just one example. But then we have a lot of sensors in our modules because you have to to measure if you have a flat surface built layer by layer, if you have special mistakes or errors in your layer, because at the end of the day, you get a digital result layer by layer, pixel by pixel, workflow by workflow and this is all automatically coming. It’s like you do a computer tomograph identical with the manufacturing process. And the experts now, that this kind of quality assurance is saving much more money than these machines are costing. So I hear from industrial uses that they are counting distance a range of $1 billion per year, just cost savings if you can use these kind of technology, it’s a digital manufacturer.

– [Adam] It’s not all about the printer, right? I mean, I’ve heard you say that before.

– [Hans] No, no, no.

– [Adam] It’s about the-

– [Hans] The printer is maximum 50% and normally it’s less than 20%. So it starts with data set up as we are working with partners in our ecosystem that do digital design, for instance.

– [Adam] Yeah.

– [Hans] A lot of people have not understood what this means. The semiconductor world knows exactly what it means, because in semiconductors you cannot design a chip via a CAD system. You would not be able to do this because of the complexity. So there is just chips that are designed via algorithms, via software in a voxel based system. And we use this kind of of software to design our parts. And we can design parts man cannot design, just you have to do it automatically digitally. And by doing this, you can come up with designs which are impossible in conventional manufacturing and even impossible for designers to think. And this sounds crazy, but this is exactly what we are doing.

– [Adam] No, it is. It’s not crazy, it’s the reality of it, right? You have to think about the design concept and how actually you are designing differently for the machines, for the actual technology. So this has become a whole new field, actually, the software out there that’s being created for these machines has really stepped up and especially the last five years, we’ve seen some amazing things happen out there.

– [Hans] Yeah, yeah. And then the next step is if you will start with the digital design, I mean, I always call this the digital materials because of the melting process, the melting and cooling process. I mean, the cooling is what we call a laser annealing, huh? That even if you have a foundry part and you want to harden it, then you take a laser and harden it by a laser. We do this all in this additive machine. So we are melting the powder, but we are also hardening it. And therefore we can create the totally new specifications of parts as for instance we have materials which are aluminum alloys, they have the weight of aluminum, but we can generate a part with the strengths of steel, having the weight of aluminum. And this is a big difference. And this is a big when you can do these kind of things. And the next step is then what is the final treatment of the parts? So the post processing, it can also be a very special temperature process, it can be a special hardening process and so on, but only if you bring every a thing together, then you have a finally manufacturing solution and this, therefore we need the ecosystem. And we are investing with a certain group of companies, what we call AM Ventures, we invest in early phases of startups that do this more or less disruptive technologies that are necessary to change the processes in manufacturing additive parts to allow us to meet the cost targets.

– [Adam] Yeah.

– [Hans] Now, just to give an idea, in the next step, we will replace foundry parts, castings, and we will be able to do with additive manufacturing castings at a cost level where they will probably close the foundries, not for maybe all the parts, but for more complex or very specific parts, I think we have a very high chance that this happens. This is more or less our next step, just disrupt the casting industry. And there is another aspect, it’s sustainability and climate change. And you just look at the CO2 output, what you create, huh? And we have been able already with simple operations to reduce CO2 output by more than 75%.

– [Adam] Wow.

– [Hans] Compared to conventional part manufacturer. But we go even further. So we think we can go up to 90%.

– [Adam] Wow.

– [Hans] And if you put a price tag on the CO2, I mean, if every saving of one ton of CO2 in Europe, we charge it theoretically by $50 per ton-

– [Adam] Okay.

– [Hans] Then you have a real price and we can underbid the conventional manufacturing substantially. And this is what we see as the next step. And we are very close. So we are talking about cost reductions of parts by a factor in the next round, around a factor of two, but in the following round, by a factor of five. And when you then compare conventional manufacturing when you have not very large quantities, then you will find that additive could be the most cost effective method to do something.

– [Adam] Yeah, that’s where the actual business case comes into play there, to be a reality when you’re looking at those details and that’s very important when people are building applications to have that business case in place because you start to see where the value is and where you could add value through the process of building layer by layer. It’s a totally different approach that a lot of manufacturing companies are getting used to now, especially with the pandemic, there’s been a big focus on what’s going on in supply chain out there, that’s a good thing. But a lot of it has to do with the redesign and the new design, new way of looking at manufacturing and that’s education. So we’re going through the educational phase right now, getting people used to knowing what to do next.

– [Hans] Yes, and you gave me a keyword, is the supply chain. I mean, look at the supply chain now, look now. The problems in supply chain, now look at cost of parts. And I mean, we see a lot of customers that are desperate because they cannot finish their product because they’re missing some element.

– [Adam] True.

– [Hans] And because of this, we get the opportunity to jump in with our technology, just to replace the conventional supply chain.

– [Adam] Yeah.

– [Hans] And this was always a cost issue because additive was an extremely expensive technology. But if we are going down by cost per part the way we are doing it, then we will hit, in a lot of different applications, we will hit the conventional manufacturing very soon. And then people will ask, why should we do it at all conventional? Please do not misunderstand. There will be still a lot of applications where conventional manufacturing is more better.

– [Adam] Of course.

– [Hans] But I say, if we hit 5% of the manufacturing market, this is huge, this is huge.

– [Adam] It is huge, yeah.

– [Hans] I mean, the manufacturing market, we talk double digit trillion dollar amounts. And you know where the additive market is today, I mean, we’re just in double digit billion dollar amount. So we have still three orders of magnitude to grow. And even if we take only 5%, then this is still a factor of 52 from where we are.

– [Adam] Yes, yeah, it’s true. I think we’re right around 1% now. So that is a big leap, but it’s very possible because we’re only in the early stages right now of everything kind of being pushed out and actually people seeing the value. So that will be a reality probably sooner than later, right? We’re coming up on the reality of all that.

– [Hans] And the other thing is because of our freedom of design, how we integrate all these parts. So today you have maybe a product where you have 20, 30, 50 parts and you can integrate it into one.

– [Adam] And these are all the processes that are reduced then, and in their manufacturing, it’s only down to one process instead of those 20 processes.

– [Hans] Yes.

– [Adam] Which is a huge business case again.

– [Hans] And this is huge. I mean, this is really huge. And so we are working with very important partners in the manufacturing world because we cannot do it alone, but we need partners that are able to take advantage of this and this is more or less our idea as the ecosystem, as we need the ecosystem, because otherwise we can’t do this. It would take 100 years if we would do it ourselves, there’s no way.

– [Adam] No.

– [Hans] I mean like Apple decided to let Foxconn make their iPhones. Why did they do it? Because they thought they couldn’t do it comparatively fast.

– [Adam] Yeah, yeah, no, you need that help, the right partners.

– [Hans] Yeah.

– [Adam] Now you also talked about, obviously EOS is a family owned company and there’s been a lot of things you’ve been able to do because you’ve kept it that way and not going public.

– [Hans] Yeah.

– [Adam] So talk about that value because I’ve seen you take advantage of that better than a lot of other companies that stay private and family owned. Talk a little bit about more that approach and how that has panned out now.

– [Hans] I think the key is we have always had in the group enough money to do what we wanted to do.

– [Adam] Ah, okay.

– [Hans] And you should not only look at EOS, I mean, if you look at the total Langer Group, we do around twice as much as EOS, but we do in if its typically 10 times what we are just doing in EOS. So we have a very rich ecosystem and normally I go public if I need the money.

– [Adam] Yeah, yeah.

– [Hans] So if I need no money, so far we needed no money. We had enough money on the bank and no bank debt, that’s more or less for the whole group, so why should I take an IPO and put me on the capital market if I don’t have to do this? So this is where we are. And it allows me to follow a long term, much more long term strategy. You see, this is the key and our company culture is based on clear values. And this is where we attract people. So we have seen over the last two years for instance, that a lot of people that came from larger companies had very much higher positions in these larger companies are joining us because they want to be part of this.

– [Adam] Yeah, no, it’s true.

– [Hans] And this is what you can do in such a family business.

– [Adam] Yeah, that’s true. I experienced it myself. I was very happy to be part of what was going on there and also to meet with you, when a lot of the leadership meeting were going on, the culture agents, I was part of the first culture agents at EOS, it is a great culture, everybody’s working together to push these things forward. I can’t say enough about how great that is. You’ve definitely set up a really good culture to grow the industry and all grow people because there’s a lot of things that happening with people there that are making these new products out there. So everyone’s in the boat together, I guess you could say on that.

– [Hans] Yeah, and I think we have been very lucky in the family that we can take this to the next generation. I mean our daughter, Marie, she is CEO of US.

– [Adam] Yeah.

– [Hans] And our son, Uli, he runs more or less the ventures and he is very well connected in this venture community and they are doing great jobs. I mean, if I look at our investments there, we will see next year that our original investments in our actual venture portfolio has built up 10 times in value-

– [Adam] Wow.

– [Hans] Just within the last few years. And this is huge. I mean, it’s unbelievable.

– [Adam] Yeah, it is huge.

– [Hans] But there companies that have these kind of elements you need for very specific applications to grow substantially. And there is, from my point of view, nobody in the world that has a comparable setup of technology portfolios like what we do. EOS is only one part of it, but the whole thing is more or less the interesting one. And I think we have everything to be the key player in laser based digital manufacturing.

– [Adam] Agreed, I couldn’t say that better. I know there’s a lot going on now and in the future, and we talked a little bit more about that on the focus that EOS has on R & D and the next generation of EOS solutions. Talk about your vision for the future of AM.

– [Hans] Yeah, I think, for me, it’s very clear. So we have identified specific applications that are just extremely huge. The application, I always analyze what is the value for the customer, as when we develop a specific application, what is the value for the customer. And most of these activities are behind the curtains because we are more or less locked in in a non-disclosure agreements and we cannot talk about individual applications because our customers don’t want us to talk about it. But I can tell you there is a huge activity going on. And if I look at my R & D cost, also something where you have to be very careful if you are on the capital market. I mean, I rarely know a company that spends 10% or more of their revenues for R and D, but we in the group, we spend 20%.

– [Adam] Yeah.

– [Hans] Which is extremely high. But so far, as long as the value contribution is so high, that’s fine. I mean, we do very well. I mean, as we feel very comfortable in our financial situation actually and this is only because we bring these different pieces together to a solution which is hard to meet from other parties. So if you have just machine manufacturers, no way. I mean, they cannot beat us because machine is only one part of the whole story.

– [Adam] It is, it’s only the one part of the whole ecosystem that we’ve been talking about now.

– [Hans] Yeah, yeah.

– [Adam] So, Hans, this has been great talking to you today. Is there anything else you’d like to add while we have you here?

– [Hans] No, I think you have asked the right questions. I think these are the key questions and there is not really much more I can tell you. We will surprise you time by time when some of these applications become public. I mean finally when it’s in the factory, then it normally becomes public, sometimes not, sometimes you see only an end product if you don’t know what matching part is inside to give this kind of performance. But I think this is where we are. This is our world. This is a manufacturing world and we are extremely pleased that we have all these opportunities and we are very happy that we have the customer base we have, we have the partners we have, and we feel very comfortable.

– [Adam] Yeah, no, thank you very much for everything that you’ve been doing and everything you continue to do, ’cause there’s so much more, as you said, there’s so much more to be done.

– [Hans] Yes.

– [Adam] And I’m looking forward to seeing more of that happening with EOS. So thank you very much for joining me today, Hans.

– [Hans] Okay, thank you for the opportunity to talk.

– [Adam] Thanks again for joining us on “AM Voices.” This additivemanufacturing.com podcast is brought to you by Metrix, an ASME company. Metrix unlocks access to resources, content, people, and expertise to inform technology purchase decisions and cement business relationships. For more information, visit our website at metrix-connect.com.