Nano Dimension Ltd. American Depositary Shares

In a move largely overlooked by the overall markets, Apple (AAPL) has quietly been expanding its titanium product offerings behind the scenes. First, it was the Apple Card, introduced in 2019, made from the material. Then last year, they unveiled the Apple Watch Ultra, which featured a titanium alloy casing. And now there’s growing speculation that the next iPhone will be made of titanium.

This shouldn't be a surprise coming from Apple, which has always prioritized its physical and aesthetic qualities. After all, titanium is a metal that is 4x as strong as steel, half the weight, and fingerprint free.

However, this shift towards titanium by the largest company in the world by market cap won’t be easy. As of 2021, the total titanium industry was valued at just $24 billion. About 466x smaller than the global metal industry, was valued at $11.2 trillion that same year.

Given the relatively small size of the titanium industry today, if the titanium iPhone rumors hold any weight, it presents a substantial opportunity to capitalize on a snowballing titanium trend. This begs the question: Who's set to benefit the most?

While some may look towards the titanium ore miners, this would likely be a mistake. Titanium material itself is relatively inexpensive. Titanium deposits can be found on every central continent except Antarctica, and the barrier to entry is relatively low.

Instead, the area that looks to have the most potential is the titanium manufacturing industry. Titanium is an incredibly difficult material to work with, and only a handful of companies have the equipment and R&D to turn titanium ore into a usable shape.

To better help identify companies in the titanium molding sector, we can use Quiver's Patent Dashboard to filter companies by specific keywords, and tickers. These patents can reveal a company's research & development in a particular field, even if not made public. Using this feature, one company that stood out among the rest was Nano Dimension (NNDM), a 3D printing and additive manufacturing company.

Further research revealed that Nano Dimension acquired two smaller players in the industry, Admatec and Formatec last year. Interestingly both companies specialize in ceramic, metal, and, most importantly, titanium molding. The same type of manufacturing process that a company like Apple would need to produce Titanium alloy frames for their phones and other products.

This is potentially a massive tailwind for the titanium industry, which historically was primarily used for niche commercial and aerospace purposes. If Apple does indeed move forward with a titanium iPhone, this could possibly set a broader trend towards titanium across electronics industry, a massive opportunity for Nano Dimension, given their titanium expertise.

Furthermore, Nano Dimensions' most recent filing reported $1.02 billion in cash, with no significant debt. This is peculiar, considering that their market cap is only $614 billion at this time of writing. This means that investors currently value Nano-Dimension's core business at approximately -$406 million, or 39% lower than it’s value on paper.

This discrepancy has led to some investors calling for a vote to liquidate the company as a potential arbitrage opportunity; however, so far, these attempts have seen major pushback from upper management.

Whether Nano Dimension is on the cusp of a titanium renaissance, or just a quick 39% arbitrage play, time will tell. We’ll be sure to continue monitoring Nano Dimension going forward to see how this situation plays out.

Disclosure: The content is for informational purposes only, you should not construe any such information as investment, financial, or other advice. I/We have no business relationship with any company whose stock is mentioned in this article.