Bringing Additive Manufacturing Into Focus at Nikon

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.

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