Hamid Zarringhalam, Nikon Advanced Manufacturing CEO, talks 3D printing strategy, challenges, growth and parallels with the semiconductor industry.
Ask the average person what Nikon makes, and they’ll probably say, “Cameras.”
Ask the average engineer, and they’ll probably say, “Lithography machines,” or “Metrology equipment.”
Ask Hamid Zarringhalam, and he’ll give you a much broader answer:
“Nikon’s influence lies at the intersection of optics, optoelectronics and precision equipment.”
Zarringhalam is a corporate vice president at Nikon Corporation, as well as CEO of Nikon Advanced Manufacturing and Nikon Ventures Corporation. He’s been with the company in various roles for almost 40 years, which makes him well placed to talk about where Nikon stands today and where it’s heading in the future, particularly when it comes to additive manufacturing (AM).
We sat down with Zarringhalam to discuss Nikon’s AM strategy, the challenges the industry is facing and opportunities for future growth.
Engineering.com: What are the strategic goals for Nikon Advanced Manufacturing, and how do they align with Nikon’s broader strategy?
Hamid Zarringhalam: Nikon’s DNA is rooted in manufacturing and precision technology. I spent over 30 years of my career in semiconductor lithography, which involves some of the most complex machines in the world. Every two years, these machines must be updated to enable Moore’s Law, which drives semiconductor innovation. Given Nikon’s success in this area, we began considering the next stage of manufacturing, which we believe is digital manufacturing.
We identified additive manufacturing as a crucial component of this shift because it allows simpler, monolithic production of complex parts, replacing traditional methods like casting and forging. It offers benefits like weight reduction, lead time reduction and waste reduction.
Nikon’s involvement began organically with the development of direct energy deposition technology, which led to our initial foray into digital manufacturing. However, we soon realized that more growth was necessary, particularly in terms of adoption rates, which were still low. Only about 2% of metal parts that could be manufactured using additive manufacturing are actually being made that way.
The challenges were clear: can additive manufacturing be done economically, at high speed, at scale and with repeatability? If we could answer these questions, we believed additive manufacturing could become a viable alternative to traditional methods. Given Nikon’s experience in semiconductor manufacturing, we felt well-positioned to address these challenges.
We also realized that the industry needed the backing of a strong company with deep technology and manufacturing expertise, as well as stability. This led to our acquisition of SLM Solutions in July 2022, which I led. We integrated our technologies with SLM’s R&D and established the Advanced Manufacturing Business Unit, with its global headquarters in California. This unit aims to make digital manufacturing a pillar of growth for Nikon, in line with our Vision 2030 strategy, which envisions Nikon as a global company enabling seamless collaboration between humans and machines.
Digital manufacturing is expected to become a significant business for Nikon, potentially reaching the scale of a billion-dollar business through the 2030s, contributing to Nikon’s overall growth and aligning with the company’s DNA and history.
Would you say additive manufacturing is at a similar stage today as the semiconductor industry was 20 or 30 years ago?
I wouldn’t say they’re exactly the same because the challenges were different back then, but there are some similarities. When I first got involved in semiconductors, there were probably 50 or 60 companies in the U.S. alone, and maybe 300 worldwide, all producing semiconductors. There were many different machines being made by various companies, many of which don’t exist today.
Moore’s Law became difficult to maintain—you had to improve every two years, doubling the number of transistors at the same cost and in the same space. The technology and R&D became increasingly complex, and every 10 years, people would predict the end of Moore’s Law. Yet, here we are, and it’s still ongoing. Now, we have powerful companies like Intel, TSMC and Samsung, building $40 billion factories around the world to produce the latest generation of machines.
‘The good news is that these factories won’t need to be at the $40 billion level seen in semiconductors, but the same dynamics, mindset, commitment and industry-government collaboration will be necessary to make it happen.’
How does this compare to additive manufacturing? Today, we have a number of companies working with complex technology. You need to invest heavily in R&D—we’ve been investing about 22% of our revenue into R&D consistently. Patience is crucial because it can take several years for a design to move from concept to full-scale manufacturing. It’s at the parts level that it starts to pay off, so you need the strength and endurance to see it through.
More importantly, the customers—such as defense primes and aviation companies—are starting to adopt this technology beyond experimental use. These customers need to trust that the companies they work with will not only continue to invest but will also be around when the products are ready for manufacturing. That’s something Nikon brings to the table, and it’s a similarity with the semiconductor industry.
There are challenges, though. To scale additive manufacturing, we’ll need large-scale factories. While people are currently testing different approaches in R&D and design for manufacturability, the transition to high-value manufacturing will require significant investment. The good news is that these factories won’t need to be at the $40 billion level seen in semiconductors, but the same dynamics, mindset, commitment and industry-government collaboration will be necessary to make it happen.
You mentioned the decision to establish the Nikon Advanced Manufacturing HQ in California. Was that motivated primarily by a desire to be closer to major players in aerospace and defense customers, such as Boeing or were there other factors?
There were several factors. Nikon is a Japanese company, and traditionally, all the business unit headquarters are in Japan. That setup works well, but this industry was growing rapidly, and we felt the need to be much closer to our customers, especially for making important decisions and communicating at the highest levels.
We already had existing operations in California, which was a significant consideration. Aerospace, defense, aviation and space industries are heavily concentrated on the West Coast, particularly in California. We also had prior investments here, so it made sense to establish our presence in this region.
It’s proven to be the right decision—we’ve been expanding our facility in Long Beach, which we started in 2021. Although my office is in Northern California, just an hour away from Sunnyvale, I’m frequently in Long Beach, visiting at least twice a month.
Being close to customers allows us to collaborate closely and make quick decisions in conjunction with them, which was one of the key reasons for establishing our headquarters here.
Regarding your acquisition of SLM Solutions, as well as Morf 3D: Do you see these acquisitions as a cornerstone of your strategy to expand in the AM space? What can you tell us about the thinking behind this approach?
There are two main approaches if you want to establish a footprint in digital manufacturing. We had already decided to focus on digital manufacturing, and we had some organically developed products. There was a time when a big company with significant resources could do everything in-house, and Nikon has the capability to do that if we wanted. However, today, technology evolves so quickly that it would be much more expensive and likely less effective to try and develop everything on your own.
‘The key to survival is investment in R&D, along with having the patience, resources and ability to scale. This naturally leads to consolidation, which, in my view, ultimately strengthens the industry.’
Instead, we looked at the missing pieces in our portfolio and in the industry, and we considered how we could address those gaps through mergers and acquisitions [M&A] or other inorganic growth strategies. M&A is only one part of it; we also engage in other inorganic activities to cultivate and integrate new capabilities. That’s what we did with laser powder bed fusion technology. While this technology is not yet perfect and has room for improvement—especially in areas like speed, repeatability and precision—we recognized that we could leverage our strengths to enhance it.
At the same time, we aimed to broaden our capabilities by acquiring and integrating complementary assets, which helps us advance the technology forward. So yes, acquisitions and bringing these assets together have been key components of our strategy.
To address another question you raised—whether we see consolidation as the way forward—in every industry, especially in manufacturing, there’s a natural tendency toward consolidation, particularly in the early stages. Take semiconductors as an example; there are many players, but the key to survival is investment in R&D, along with having the patience, resources and ability to scale. This naturally leads to consolidation, which, in my view, ultimately strengthens the industry.
We’ve touched on several challenges for additive manufacturing. There’s a general consensus that speed and repeatability are two of the biggest hurdles to adoption. How is Nikon positioning itself to address these challenges in particular?
I would say there are a few key points to consider. First, at the machine technology level, we focus on integrated machines that can operate at high speeds with precision. Our goal is to develop large or even medium-sized machine platforms that meet these requirements. Nikon has expertise in optics, optoelectronics and precision equipment, and we’re already integrating these technologies into our existing and future products. We’re working closely with our global development team, and you’ll hear more about this impact from some of the projects we’re doing, including R&D at our Long Beach facility. This collaboration ensures we bring together the best technologies from companies like SLM Solutions, which has excelled in laser powder bed fusion, and Nikon, with our strengths in optics, metrology and precision, enabling us to scale effectively.
Another crucial aspect is working closely with customers to accelerate their adoption of metal additive manufacturing. Unlike semiconductors, where Moore’s law drove inevitable progress, in additive manufacturing, there is still a choice between traditional methods like casting and forging, despite their limitations. We need to expand our customer base and speed up their journey toward adopting additive manufacturing.
At our Long Beach facility, for example, we’ve created an environment that caters to ultra-secure defense applications and other benchmark testing. This allows customers to evaluate additive manufacturing in one place—determining if they can produce a part, do it repeatedly and scale it effectively.
Through our investment and by bringing these assets together, we can work closely with customers to catalyze their adoption process. However, it’s not just about us; customers, governments and institutions also need to invest to scale this technology. As a company, by contributing these collective assets to the ecosystem, we facilitate this process.
We’ve been talking about AM in the context of aerospace and defense, but another industry where its benefits are often touted is in medical devices. Is that less of a focus for you?
There’s no question that the medical field has seen significant advancements in using additive manufacturing, both in metal and polymers. Established players in that field have made considerable progress. However, entering that field is just as complicated, if not more so, than entering defense or aerospace.
It’s no secret that we don’t have a strong footprint in the medical vertical. That said, we do have ongoing technology developments and solutions that cater to the medical market, and hopefully, in the future, we’ll be able to approach that area with the same vigor as we do in defense, aviation and space. But as of today, we don’t have a strong presence in the medical sector.
Let’s talk about emerging trends: What developments are you most excited about for the next decade? What do you think will have the biggest impact on the market in particular and 3D printing technology in general?
As I mentioned, we’re currently at about a 2% adoption rate for metal additive manufacturing. A couple of years ago, the expectation was that this would grow to 5% within five years, which represents a 30% growth rate in terms of adoption. The exciting part is that even at 5%, there’s still 95% of the market to go, so there’s a lot of promise for additive manufacturing.
Another key point is that the number of applications for additive manufacturing is increasing due to various factors. Some companies and verticals are eager to accelerate their adoption, especially in defense, aviation and automotive industries. This is exciting for us because the requirements for large, very large and ultra-large machines align well with our technology roadmap.
‘My advice to engineers is to keep doing what you’re doing. It’s hard work, but it’s what the world needs. Focus on creating things that will make a difference in society and improve people’s lives.’
Looking at defense, the current global situation is driving demand, and the democratization of space is also contributing to the need for additive manufacturing capabilities. To meet these demands, we need to overcome challenges like geometric limitations, alloy limitations and the ability to scale production while maintaining repeatability.
We also need to establish megafactories that can prove the feasibility of large-scale manufacturing. Once these challenges are addressed, the future of this industry looks very promising, which is why we see it as a growth pillar for Nikon going into the 2030s.
You obviously have a lot of experience working with engineers in a leadership role. Do you have any advice for engineers who are looking to become leaders in advanced manufacturing?
I’m not an engineer by training, but I’ve spent my entire career working with engineers, and I can tell you that, given the pace of technological evolution and the competitive landscape—geopolitically or otherwise—there’s always a shortage of engineers. The ability to put things together and make them work is crucial, and the fields of mechanical, electrical and other engineering disciplines are expanding.
Over the last 40 years, the pace of technological acceleration has been driven by engineers tackling increasingly complex challenges. However, I think we’ve seen a bit of a shift in focus over the last decade, with more attention on social media, software and entertainment. While those fields are important, the ability to create things that solve societal problems is vital, and I believe we’re seeing a return to that focus.
My advice to engineers is to keep doing what you’re doing. It’s hard work, but it’s what the world needs. Focus on creating things that will make a difference in society and improve people’s lives.
