Dive Brief:
- Siemens Healthineers said Wednesday it is investing $150 million to expand production in the U.S.
- Siemens is relocating manufacturing operations for its radiation oncology business Varian from Mexico to the U.S. The company said the change will add around 50 jobs in California.
- The company is also building a 60,000 square foot “Experience Center” in North Carolina, investing $141 million in a research and innovation district that it has been involved with since 2023.
Dive Insight:
News of the investment comes one week after Siemens Healthineers said tariffs will have a pretax impact of up to 300 million euros this year. Taxes on goods entering the U.S. from Europe account for most of the anticipated impact, which drove the company to lower the bottom end of its earnings range. Trade with Mexico is another contributor.
CFO Jochen Schmitz said on an earnings call last week that “it is too early for larger structural decisions in terms of adopting our production footprint.” The company has been investing in the U.S., though, and packaged details of its activities into a press release.
Varian is relocating manufacturing from Baja, Mexico, to Palo Alto, California. The Siemens Healthineers unit invested in a facility in Mexico in 2022. Linear accelerators are made in Baja and shipped to Palo Alto for final assembly. Talking on an earnings call in February, Schmitz said “there is some subassembly in Varian coming from Mexico” and as such the cancer business will take a bigger tariff hit than other units.
Moving production to Palo Alto “will reduce the complexity of our global supply chain and improve our ability to respond to demand for Varian’s radiotherapy solutions,” Siemens Healthineers said in a statement. Varian faced logistics problems in 2022 and 2023 that slowed growth at Siemens Healthineers.
The company disclosed the relocation alongside details of the construction of a Siemens Healthineers Experience Center in Charlotte, North Carolina, and the opening of supply depots in California and New Jersey. Siemens Healthineers shared details of the two supply depots in February, explaining that they will enable the company to offer same-day delivery to more customers.
