Outline:
- Full Workflow Integration - from Concept to Physical
- Outsized Diversification - and still Profitable
- AM Is Still in Early Industry Formation
- Materialise in Five to Ten Years
At the time of this writing, Siemens has a market value of over 200 billion Euros. Materialise has a market value of 0.4 billion Euros. So it seems early to ask if Materialise will become Siemens. It’s not just a question of when - it’s a question of if ever.
However, Materialise has a sprawling business structure that greatly resembles the global conglomerates like Siemens and GE excluding their energy business, before both companies broke into trios¹. All operate in diverse businesses including design, software, workflow automation, and manufacturing. These are not just diverse businesses - they represent the full span along the concept-to-physical value chain. All work with customers of various sizes in diverse industries, including healthcare, industrial manufacturing, automotive, and aviation. All seem diversified beyond business logic, or managerial grip - a factor leading to the breaking up of Siemens and GE.
In the end, it’s unlikely that Materialise will grow into the Siemens before the split - a sprawling organization is extremely hard to grow without falling into pieces. But with strategic discretion and managerial control, it has a good chance of growing into the companies that Siemens split into.
Before we go far on what will become of Materialise in the next five to ten years, let’s examine its current business and structure against peers and competitors.
Full Workflow Integration - from Concept to Physical
Materialise has a formal reporting structure of three segments: Materialise Medical, Materialise Manufacturing, and Materialise Software. But this is not the best way to understand its business.
Instead, we should look at its broad range of products and services with the view of customer workflows. Starting from initial product design, to integration and coordination, to production and manufacturing - Materialise offers products and services along the full customer workflows, from concept to physical. It doesn’t hold all points along the flows, but it holds enough important ones to plant itself solidly through the workflows.
Here is a workflow-view of the businesses of Materialise, peers, and potential competitors:
Clearly, Materialise’s strategic positioning is beyond a point solution provider. It is an integrated solution provider of full workflows². This is a position of market power. The strategic next step would be an ecosystem player. That’s where we see the likes of GE and Siemens.
Outsized Diversification - and still Profitable
A main diversification problem for small companies is that they don’t have the financial or human resources to work on many products and services. Profitable diversification requires scale.
The graph below illustrates the diversification vs. size tradeoff. Notice that Materialise is on the very left - it’s the smallest in terms of revenue. Then, note that most companies are along the diagonal - the bigger the companies, the more diversified they tend to be. Now notice how unusual the breadth of Materialise is for a company of its size.
Stratasys and 3D Systems are also away from the diagonal. This tells us something about the AM industry. I will discuss it in the next section.
As a result of diversification economics, when smaller companies over-diversify, the sales revenue is typically not enough to cover all costs. So they have to rely on other financial resources, such as investors or bank loans. And they usually operate at loss.
Materialise, on the other hand, has been profitable for three consecutive years. This is likely not random. It is a market validation of Materialise’s strategy, management, and operations.
What is unusual is not that Materialise diversifies across the concept-to-physical value chain - it does so at a remarkably small scale, profitably.
AM Is Still in Early Industry Formation
Those who have been in AM for long might disagree. That’s fair. It has been 40 years since the first 3D patents.
But through the lens of technology maturity, business environment, and industry economics, the AM industry is immature. AM technologies are evolving quickly, without dominant designs or widely accepted architecture. Customers are trying to figure out AM, and how to integrate AM in their processes. And market concentration by AM companies is low if we look at the broad industrial manufacturing sector that AM actually competes in. The AM industry, like AI, has taken many decades to incubate.
As remarked earlier, Materialise, 3D Systems, and Stratasys are the outliers from the diversification-size diagonal. We know that many AM companies step beyond traditional industry boundaries. For example, EOS, starting as an equipment manufacturer, has stepped into material businesses. Carbon is in the full chain from design to materials and equipment to clinical networks.
This kind of diversification is antithetical to the competitive economics in a mature industry. A mature industry is driven to specialization and cost competition. Due to this cost-based specialization, very few companies can afford to diversify.
All this says that the AM industry is still taking shape. AM might be beyond project POC, but it hasn’t fully completed a business-model POC. What Materialise grows into - what it keeps and what it sheds - is an interesting one to watch.
Materialise in Five to Ten Years
AM technologies, with cost advantages over traditional manufacturing and synergies with AI and robotics, offer a real opportunity for Materialise to grow into a large conglomerate, in the growing AM industry. Materialise has the business setup, and likely the ambitions, to be an ecosystem player like Siemens. But, will it happen?
What happens next is subject as much to deterministic laws of competition and growth as to incidental internal and market factors. This is my analysis of how it unfolds.
Would Materialise grow into a Siemens before the split?
This is the natural thing to speculate. Today, Materialise already has a diversified corporate setup resembling Siemens. It spans value chains and customer industries. Scaled up 500 times - and it’s not as unthinkable as it looks - it would have a market value and revenue in the league of Siemens.
But controlled, disciplined growth is rare. Organizations are complex, living systems. Each unit has its own will that pushes against its management control system. The market offers more growth opportunities in one area over another, at various times. This combination of internal and external forces will shape Materialise more than management control will.
If we look at Siemens and GE 100 years ago, they were solid industrial manufacturers. They grew into global conglomerates through various internal and external factors. The recent splits into three separate businesses in healthcare, energy, and industry suggest that growing a conglomerate is highly difficult.
How do you become a Siemens? Usually not by starting like one. I consider it unlikely that Materialise will grow into a Siemens-type conglomerate before its split.
What would Materialise grow into?
If not growing into the likes of Siemens, what would Materialise become in 5 to 10 years?
It’s almost certain that Materialise will have considerable difficulty in achieving balanced, disciplined growth. Balancing the internal and external interests in diverse products and services is an intricate act. Not many companies succeed in doing so.
Siemens is an example in this regard. For years, it had to balance the three main sectors of healthcare, energy, and industry - each of these grows and lags on different cycles and clocks. It finally split itself into three companies.
GE experimented with a different solution but ended in a similar way. In smoothing out the economic cycles of busts and booms, GE provided customers with financing - a diversification. But the financial industry has much higher returns than industrial manufacturing. As a profit-seeking business, GE let it grow into a main business. Just before 2008, GE Capital contributed to almost half of GE’s profit. In the end, GE sold its financial business, and went down a route of splitting into three companies like Siemens.
Today, Siemens is still on its long way to peel off its healthcare business, an act that started in 2018, with the shareholder vote on relinquishing its majority stake set for February 2027. It’s still a conglomerate of considerable size, with few peers. The full balancing act and growth trajectory remain to be seen. It is clear, though, that medical technology is no longer part of what Siemens considers its core business.
Do Siemens and GE have competent executives and managers? I have no doubt. Their lessons show how difficult it is to manage balanced, disciplined growth. I consider it possible that Materialise will continue to grow from its current structure, with the exact outcome contingent on various factors.
Unless it takes the decision of trimming and focusing.
Would Materialise trim itself?
As a public listed company, Materialise has rare strategic sovereignty - the founders and the CEO hold more than 55% of the company shares, and more than 70% of the control of the company.
Currently, integrated workflow solutions across customer industries are useful to test the business cases of AM. As the AM industry matures, competition will shift further onto costs and specialization.
So I believe strategic divesting is the most likely outcome, though not immediately. The timing decision would need to balance managing a complex company with the maturing AM industry. While one presses for an earlier trimming and focusing, the other requires the patience of waiting through business-model POC - knowing what to keep when AM becomes a mature industry. Materialise is a long-term player. I would bet that strategic actions are waiting for industry maturity.
There are two ways to trim: by customer industries such as medical, or by functional industries such as software. Interestingly, the formal reporting structure of Materialise makes both possible:
The current segment structure is unusually flexible in this regard. It is almost built for strategic options.
Either way Materialise trims, it will not become Siemens before the split - but it can grow into the companies that Siemens decided to split into.
That would be a significant success. And wise too.
¹ Both broke up into industry, medical, and energy sectors in the last few years.
² https://www.additivemanufacturingstrategy.com/articles/customer-workflows-additive-manufacturing/
³ 3D Systems was profitable in 2025 due to disposition gains. Otherwise it operated at loss.
Ling Xiao, PhD