Aerospace and Defense Manufacturing Focus on Automation

Aerospace and defense growth is key to the Southern California economy, and it is spurred by new technologies, evolving needs from the government, strong funding from venture capital firms, and a collection of talent that is building on the region’s legacy and modern successes that coalesce around shared goals that are taking humanity to new heights.

“Silicon Valley can manipulate the bits. We do the atoms,” said Erik Palitsch, co-founder and chief executive at El Segundo-based Freeform, a 3-D metal printing company. “We make things for customers that couldn’t exist before. The manufacturing system is antiquated. AI intelligence doubles every nine months, but the physical world isn’t keeping up. It’s a domain where there’s a bottleneck.”

Freeform raised $67 million in a Series B round in February to expand manufacturing and advance automation. Investors include Apandion, AE Ventures, Founders Fund, Linse Capital, Nvidia’s NVentures, Threshold Ventures, and Two Sigma Ventures. That brought total funding to $179 million.

Palitsch envisions a structural renaissance that is going to push the boundaries of what’s possible, led by a new generation of talent. He spent years as an engineer at SpaceX working on rocket designs, but left in 2018 to tackle new challenges. The company has developed its own printers, software, and factory with the intention of scaling production of metal-printed products in the defense and commercial sectors. The company operates at full capacity and has accelerated sales activity to scale with its customers by investing in new facilities, although he noted that warehouse space is hard to find in the South Bay where many of the fastest-growing hard tech companies are located.

“There’s a lot of talk about reindustrializing and we will play a role in that, but the idea that I push back on is rebuilding factories. There won’t be a big warehouse with operators and punch cards,” said Palitsch. “Customers will upload a part and everything downstream will be manufactured autonomously within the next 12 months.”

While new technologies have the ability to create new parts and products in days or weeks rather than months or years, tracking those parts, their supply chain, and the regulations surrounding their use in aerospace and defense requires new software that leverages AI to ensure that workflows, teams, and systems can be tracked on one platform. Even when the workflows are automated, the process of documenting them is required to ensure the validity of the products.

El Segundo-based First Resonance has nearly 100 customers, from startups to companies with decades of experience.

“We are focused on the ability to meet capacity and scale operations. It’s easy to build one of anything, but it’s really hard to build 1,000. The physical world is unpredictable and bringing down cost is huge,” said Karan Talati, co-founder and chief executive of First Resonance. “There is an enormous amount of attention and need for modern defense capabilities. We see the spike in activity for our manufacturing customers.”

Talati explained that there is a significant amount of paperwork required to develop an airplane or nuclear reactor that tracks the processes needed to build the products. Much of that work is still done manually and it’s a laborious process. That work can consume vast amounts of time for engineers and executives who would rather concentrate on innovation and revenue generation. Ultimately, Talati envisions a time when regulators and customers will not only ask how AI has been utilized in development, but serve as a layer of efficiency that monitors development and adds a review process to optimize operations.

While software will help monitor factories, ultimately, the biggest challenge to scaling operations is setting up and deploying manufacturing facilities at a cost that is competitive with other countries. To that end, robotics manufacturer Machina Labs raised $124 million in a Series C round that closed in February to open a new, 200,000-square-foot factory. The Chatsworth-based company has an eye on further expansion, including a facility in the Middle East Gulf region. Ultimately, however, the company’s robotics are designed to be able to manufacture products anywhere in the world because a unit can fit into a standard cargo container.

“We still have a cost challenge with manufacturing in the U.S. for defense. Right now, there’s not enough active capacity to meet the demand,” said Ed Mehr, co-founder and chief executive of Machina Labs. “If we do things right, we will bring the cost down, but it only happens if we expand capacity.”