Breaking the Bottleneck | Issue 39
[1/29/2023] New Manufacturing Market Maps, Rabbit R1, GE's Incredible Turnaround, and More!
Breaking the Bottleneck is a weekly manufacturing technology newsletter with perspectives, interviews, news, funding announcements, manufacturing market maps, and a startup database!
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New Manufacturing Market Maps!
Discrete Manufacturing
Process/Continuous Manufacturing
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News
Policy Outlook 2024: What’s on Manufacturers’ Minds [Manufacturing Dive]
Here are the top concerns of three major manufacturing industry groups as they engage with policymakers in Washington, D.C.
Federal funding and defense spending for aerospace and defense industries to maintain global leadership and national security
Senate Majority Leader Chuck Schumer and House Speaker Mike Johnson announced a $1.66 trillion appropriations deal for fiscal year 2024, including funding for the National Institutes of Standards and Technology's Manufacturing USA program.
The budget also includes over $886 billion in defense spending, mainly from the Fiscal Year 2024 National Defense Authorization Act (NDAA), which aims to modernize defense technologies and support innovation, including fuel cell electric vehicles (EVs) and additive manufacturing for aerospace parts.
A more balanced approach in the transition between Internal Combustion Engine (ICE) and Electric Vehicles (EV)
As more automakers transition to electric vehicles (EVs), several states, including the District of Columbia, have adopted California's zero-emission vehicle emission standards, effectively banning new gas-powered vehicles by 2035.
Industry groups, such as the American Fuel & Petrochemical Manufacturers, express concerns about these bans and argue that they may hinder emissions reduction improvements in gas-powered engines.
Greater visibility and regulator balance across the chemical sector
The Environmental Protection Agency (EPA) and various state governments are increasing oversight of chemicals, particularly per- and polyfluoroalkyl substances (PFAS).
The EPA has enacted rules requiring companies to provide information on PFAS in their supply chains and monitor these substances.
States like Minnesota and Maine have passed laws to ban PFAS from various products.
MIT Researchers Demonstrate Rapid 3D Printing With Liquid Metal [MIT]
Additive Casting Delivers Cheaper Lighter Cold Plate To OEM [TCT]
An automotive manufacturer collaborated with Continental Engineering Services and Enable Manufacturing to create an electronics cold plate using additive casting technology to minimize size and mass. The key features of this development include consolidating two parts into one, implementing an organic artery topology for optimal flow paths and reduced wall thicknesses, and incorporating conformal cooling and a water jacket to maintain consistent temperatures for the electronics. Binder jet 3D printing technology was used to create complex molds, and different materials were used for specific components. The additive cast electronic cold plate components offer several advantages over traditional methods, including consolidation, up to 25% weight reduction, a 50% cost saving, and saving 7kg of embedded carbon for each part, potentially leading to significant CO2 emissions reductions. After nine months of development and series production approval, up to 750 units of the additively cast pieces were ordered, with plans to install them in cars by Q3 of 2024.
How How Design Drove $10M in Preorders For Rabbit R1 [Fast Company]
Jesse Lyu, a figure not widely known to the public, recently made waves in the AI hardware industry when he unveiled the Rabbit R1. The Rabbit R1, in collaboration with teenage engineering, is a bright orange walkie-talkie-like device, known for its stoic-retro design appeal. The gadget features a single large button for push-to-talk functionality, a chunky scroll wheel for screen navigation, and a camera with its privacy door. This combination of hardware elements and its distinctive design has sparked excitement in the AI community given its primary purpose is to control AI "rabbits," (agents) capable of managing various tasks and workflows. Lyu's background in culture and consumer products has influenced his design choices. He sought to create a device that feels fun rather than dystopian. The Rabbit R1's walkie-talkie button, inspired by first responders' reliable equipment, offers a tactile and dependable interface in an emergency. The design invokes a sense of nostalgia and playfulness, resembling a real-life Pokédex or Teenage Engineering's Playdate portable game console.
How GE’s CEO Got the Stock to Outperform Apple & Microsoft [Fortune]
When Culp took the reins in 2018, he faced a daunting challenge: a lumbering conglomerate burdened with around $140 billion in debt. Culp has since transformed the company and in FY 2023, GE achieved a staggering share price appreciation of 95.8%, outperforming not only its industrial peers but also tech giants like Apple, Google, and Microsoft. Culp's transformation playbook at GE included three critical initiatives. Firstly, he championed lean manufacturing principles, emphasizing the importance of standardized work processes and continuous improvement. Secondly, Culp introduced a system of project tracking, where projects are tagged as "green" if they are on track and "red" if they are facing challenges. Culp encourages a problem-solving approach when issues arise, rather than shying away from them. Lastly, Culp reorganized GE into 30 separate profit centers, granting each unit full control of its income statement and balance sheet. He reduced the central staff at headquarters, promoting efficiency and accountability at the business unit level. These initiatives would ultimately lead to the dissolution of the conglomerate into three distinct, publicly traded entities, each boasting strong balance sheets with investment-grade ratings. Moving Larry Culp himself will lead GE’s prized aerospace division as CEO and chairman, marking a significant departure from his previous roles overseeing multiple CEOs within a conglomerate. GE Aerospace operates on a "razor and blade" model, selling engines at cost while reaping substantial profits from overhauls, inspections, and spare parts. With a commanding share of the global commercial engine market, GE is poised for substantial earnings as its vast installed base of engines, particularly the LEAP series, enters the servicing phase.
Eager for Economic Wins, Biden to Announce Billions for Chips [WSJ]
Despite more than 170 firms applying for funding from the $53 billion Chips Act, only two small grants have been issued thus far. However, industry insiders anticipate that larger grants in the billions of dollars will be announced soon to kick-start the manufacturing of advanced semiconductors. These announcements are expected to come before President Biden's State of the Union address on March 7, allowing him to showcase economic achievements in the lead-up to the presidential campaign. However, concerns exist regarding permitting delays and the time it may take for taxpayer-subsidized factories to begin chip production in the United States. For example, the National Environmental Policy Act (NEPA) is a significant hurdle, requiring environmental reviews before grants can be released, even if state and local permits are already in place. NEPA reviews have historically taken several years and can add substantial costs to chip plant construction. A Senate bill to exempt major Chips Act projects from NEPA review has yet to gain traction in the House. Negotiations for funding have also faced challenges due to a lack of clarity on the program's rules, concerns about conditions related to activity in China, profit-sharing, and wage considerations. Additionally, the semiconductor industry is predicted to face a shortage of 67,000 workers by 2030, further complicating the timeline for chip manufacturing.
How One Mine Could Unlock Billions in EV Subsidies [MIT]
Talon Metals is seeking regulatory approval to access one of the densest nickel deposits in the United States and to establish the nation's first complete domestic nickel supply chain. One of the main beneficiaries would be battery manufacturers, particularly those using Talon's nickel. They could potentially secure more than $8 billion in tax credits, with a significant portion likely going to EV giant Tesla who has already committed to purchasing tens of thousands of metric tons of nickel from the proposed mine. Talon's mining project, if approved, would involve extracting nickel-rich ore that could be used to produce lithium-ion batteries for approximately 2.4 million electric vehicles. The ore would then be processed and converted into highly refined forms, potentially earning significant subsidies for the companies involved in these processes. In addition to the potential IRA subsidies, Talon Metals has secured federal grants to support its projects, including nearly $115 million from the Department of Energy to build a nickel processing site in North Dakota and $21 million through the Defense Production Act for further nickel exploration.
Research:
Deloitte 2024 Semiconductor Outlook [Deloitte]
The semiconductor industry experienced its seventh downturn since 1990 in 2023, with a 9.4% decrease in sales to $520 billion, less severe than initially expected. For 2024, global sales are forecasted to rise to $588 billion, a 13% increase from 2023 and 2.5% higher than 2022’s record revenues. Memory chip sales, a major factor in the industry, dropped by 31% in 2023 but are expected to rebound to 2022 levels in 2024. PC and smartphone sales are projected to grow by 4% in 2024, recovering from declines in 2023. High inventories and lower fab utilization, expected to fall below 70% in Q4 2023, will be challenges for the industry. The 2024 outlook focuses on five key topics: generative AI accelerator chips, smart manufacturing trends, the need for more assembly and test capacity, the risk of cyberattacks on chip industry IP, and geopolitical issues impacting advanced node manufacturing and gen AI semiconductors. Generative AI chips are predicted to significantly boost the industry, with sales expected to exceed $50 billion in 2024, accounting for about 8.5% of total sales. These high-value chips, including advanced node logic processors, high bandwidth memory (HBM3), and advanced connectivity chips, are sold at a premium.
Harvard Researchers Make Breakthrough With Solid-State Battery [Electrek]
Researchers at the Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS) have developed lithium metal batteries that can be charged and discharged at least 6,000 times, a significant advancement compared to other pouch battery cells. These solid-state batteries use a lithium metal anode, offering ten times the capacity of commercial graphite anodes and the potential to greatly increase the driving range of electric vehicles. One of the major challenges in solid-state battery design is the formation of dendrites on the anode's surface. Dendrites are metal projections that can grow into the electrolyte, causing short circuits or even fires. They typically form during the charging process when lithium ions move from the cathode to the anode, creating an uneven surface on the anode. In their latest study, they used micron-sized silicon particles in the anode to prevent dendrite formation by constraining the lithiation reaction and promoting even plating of a thick layer of lithium metal. The technology has been licensed to Adden Energy, a Harvard spinoff company, for further development and scaling.
Podcasts:
How Boeing’s Corporate Culture Started to Rot [Odd Lots]
Rapid Prototyping Deep Dive [Builder Circle]
Manufacturing Deals🏭💵
Sion Energy - A lithium-metal battery developer using a unique compression technology to boost the range efficiency of EVs
$75 million [Venture] - Led by LG Energy and joined by Hillspire and Euclidean Capital
UpSmith - A company building a product to help employers source, screen, train, and deploy new technicians
$5 million [Seed] - Led by Hannah Gray VC and joined by a16z, GSV Ventures, and Asymmetric Capital Partners
Planned Downtime 🏭🧑🔧
Monkey Man Trailer