Siemens AG announced new investments worth billions of dollars. The funds will be used to expand a factory in central China, but also to build a new high-tech factory in Singapore – a shift in strategy.
Siemens wants to invest 2 billion euros in factories and research in Asia, the US and Europe this year. The group says it should focus on Asia: in central China, for example, the Chengdu factory will be expanded by 140 million euros. At the same time, he is investing 200 million to build a new high-tech factory in Singapore. As a result, 400 jobs will be created at each of the two locations.
In Chengdu, Siemens plans to expand its production capacity by 40%. “The Chinese market is strong and will continue to grow,” CEO Roland Busch told Handelsblatt. No company can miss this attractive market.
Manufactured in China for the Chinese market
However, Siemens also saw the risk of focusing too much on a country like China – hence the factory in Singapore. “We hope to meet strong demand in Southeast Asia from here,” Busch said. In addition to India, countries such as Thailand and Vietnam are also attractive sales markets for the group. Production in China will be mainly for the Chinese market.
Jens Hildebrandt, managing director of the German Overseas Chamber of Commerce (AHK), said in an interview with Wirtschaftszeitung that many companies are currently taking a similar approach: Exporting from China to other Asian countries is becoming “unattractive”, partly due to increased costs , on the other hand for geopolitical reasons.
The location of Siemens Control Technologies’ new plant in Singapore was a political issue – and a shift in strategy of sorts. The group wants to reduce its dependence on individual markets and locations. This decision was previously reconsidered. I heard from the company circle before that the board of directors originally wanted to build a new factory in China. It was only after considerable resistance from the supervisory board in light of heightened geopolitical tensions that the company turned to Singapore.
investment plan Also available in Europe and the US
To date, Siemens has two plants around the world in which the Group manufactures control technology for machines and entire plants: in Amberg in the Upper Palatinate and in Chengdu.
Further investments in Europe and the US are expected to be announced later this year. Adding to some of the investments already announced this year, including in the Czech Republic, Amberg, Frankfurt and the US, the investment plan should amount to around EUR 2 billion. That would leave about $1 billion for unspecified European and US investments.
Siemens is growing significantly faster than the market, the CEO said. “So today we are announcing an investment strategy to drive future growth, drive innovation and build our own resilience.”
artificial intelligence business
Busch said the investments supported the group’s strategy of “connecting the real and digital worlds and our focus on business diversification and localization”. Investments should focus on artificial intelligence and industrial “metaversum,” in which Siemens partners with chipmaker Nvidia and U.S. software company Microsoft, among others.
The group has already achieved success in the digital factory sector, where industrial automation plays a central role. The group is already the world market leader in this segment and has recently been able to maintain this position.
Based on information from Stephan Lina from BR.