Industrial megacompany Siemens has announced a $2.18 billion (€2 billion) investment to develop new global manufacturing capacity as well as innovation labs, education centers and other facilities.
A key piece of the announcement is a new high-tech factory planned in Singapore, which the company says it needs to serve the booming Southeast Asia markets.
“Our technologies address secular growth trends where our customers need our support to become more competitive, resilient and sustainable. Siemens is experiencing significantly above-market growth. Today we announce an investment strategy to boost future growth, drive innovation and increase resilience,” said Roland Busch, President and Chief Executive Officer of Siemens AG.
“The investments underpin our strategy of combining the real and the digital worlds – as well as our focus on diversification and local-for-local business. We are clearly doubling down on our strong global presence to support growth in the most relevant markets in the world.”
The company says it will increase research and development spending by $545 million for 2023 over 2022, specifically for technologies such as artificial intelligence and the industrial metaverse. This R&D is focused on strengthening Siemens’ market position in core technologies including simulation, digital twins, artificial intelligence and power electronics, as well as supporting the development of the Siemens Xcelerator open digital business platform.
The company recently announced a partnership with Microsoft to speed up code generation for industry automation by using ChatGPT. With NVIDIA, Siemens is working to build the industrial metaverse to improve design, planning, production and operation of factories and infrastructures.
New and additional capacity in Asia
The new high-tech factory in Singapore will see about $220 million in investments and it will be built using Siemens' own digital twin and intelligent hardware technologies. Siemens claims the plant will set “a new standard for connectivity” to showcase the possibilities of digitalization, as well as incorporating highly automated manufacturing processes. The investment is expected to create about 400 jobs.
A wave of global investments
Siemens will spend about $150 million (€140 million or RMB 1.1bn) to expand its digital factory in Chengdu, China, creating another 400 new jobs. It also announced the investment in a new digital R&D Innovation Center in Shenzhen to speed up development of motion control systems with digitalization and power electronics technology. The company says its Chinese customers are early adopters of new technologies, especially in digitalization and high-tech manufacturing.
Siemens says a portion of the $2.18 billion investment and $500 million in new R&D spending will flow into its Siemens Healthineers division but did not disclose the amount.
Previous announcements
Earlier this year, Siemens committed to expand production in Trutnov, Czech Republic, and to enhance capacity at its WEF Global Lighthouse Factory in Amberg, Germany. Moreover, Siemens put $32 million (€30 million) into its switchgear plant in Frankfurt-Fechenheim, Germany. Siemens Mobility recently announced $220 million to build a new rolling stock factory in Lexington, N.C., expecting to create more than 500 jobs by 2028.
In fiscal year 2022, 47 percent of sales of Siemens are attributable to Europe, the Middle East and Africa (EMEA), 29 percent to North and South America, and 25 percent to Asia/Australia. Earlier this year, Siemens reported a record order backlog of $115 billion (€105 billion) and raised its guidance for the second time this year. Siemens expects additional growth potential for Digital Industries, Smart Infrastructure and Mobility in their addressable markets of around $191 billion over the next five years.