With €2B Investment, Siemens Is All-in on Industrial Metaverse & China

Formnext Germany

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Last week, I wrote about how Xi’an Bright Laser Technology’s (BLT’s) activity in 2023 highlights that the identical shift toward digitalization is happening just as quickly in China as it is in the US and the EU, with one example being BLT’s recently bolstered partnership with Siemens. This week, Siemens is already revealing further bold movement in that same direction. Amid announcing that it will disclose €2 billion (about $2.17 billion) in new investments throughout 2023, the company noted that around $150 million will go towards expanding its digital factory in Chengdu, China.

Although most of the €2 billion includes funding announced today and more to be shared later this year, some of the investments comprising the total have already been disclosed, including $220 million for increased rail manufacturing capacity in North Carolina. Another such investment that is particularly relevant to the present story was announced in May, 2023: almost $150 million for an R&D and production site in Shenzhen (“China’s Silicon Valley”), for Healthineers, Siemens’ medical device division.

Moreover, over $200 million will go towards a new factory in Singapore, which the company notes will be built around “Siemens’ own leading digital twin and innovative, intelligent hardware technologies.” Thus, while the new investments are certainly multifaceted, and while Siemens refers to its overall agenda as an “all-regions strategy,” it does appear that the industrial metaverse, Southeast Asia, and China, in particular, are the plan’s cornerstones.

Especially considering another new partnership that Siemens announced in Q2 — involving a collaboration with Microsoft to combine Teams, OpenAI, and Siemens’ Industrial Edge for manufacturing workflows — this announcement epitomizes the unbelievably rapid transition that the global economy is currently starting to undergo, about as well as any single development could. As I noted in my post about BLT, “…it is quite likely that, over the next decade, a decrease in the growth of physical connections between Western and Chinese economic orders still won’t imply a general lack of growth in the connectedness between the two spheres. A sufficient amount of physical growth has already happened; the rest can take place digitally.”

Siemens’ engineering center in Chengdu, China

In a press release about the new investments to be announced in 2023, Siemens AG’s President and CEO, Roland Busch, said, “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. 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.”

Rendering of Siemens’ planned factory in Singapore

All of a sudden, it is becoming obvious that, Mark Zuckerberg notwithstanding, the metaverse isn’t just some ham-handed parody of dystopia that has broken through the looking glass into real life. People may or may not flock in droves to that particular exponent of the virtual realm for recreational purposes, but that might be beside the point. In cases where the technology is required in order to bring in labor from afar, no one will care about the cultural lampooning of out-of-touch billionaires gesticulating excitedly on stage in their computer goggles. They will only care about how effectively it gets the job done.

Images courtesy of Siemens

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