Intuitive’s trade war strategy holds lessons for other device developers

Intuitive Surgical’s approach to the global trade war set off by President Donald Trump’s import taxes could help other device developers and manufacturers navigate tariff turmoil.

In 2024, Intuitive manufactured 98% of its robotic systems in the U.S., 70% of its endoscopes in Europe, and about 80% of its instruments and accessories in Mexico, CFO Jamie Samath said while discussing the company’s financial and operating results for the first quarter of 2025.

“We source raw materials and other components that go into these finished products from suppliers around the world,” he said. “The net result of our manufacturing footprint and global customer demand is that Intuitive is both a significant U.S. manufacturer and has become a significant net U.S. exporter.”

On the same call, Intuitive CEO Gary Guthart described the surgical robotics leader’s “principles for navigating the current environment.”

“Our first priority is to assure supply of our products to our customers globally,” he said. “We have spent years becoming a trusted provider of great products and services, and our first commitment is to maintaining the status for those who depend upon us. We believe that high-quality, minimally invasive care at industrial scale will remain a global need, regardless of trade policy. And our long-term opportunity remains robust. We will continue to manage the business for the long-term and invest toward improvement in the Quintuple Aim.”

(If you’re not familiar with the Quintuple Aim, Guthart has defined it in recent years as the mission “to deliver better patient outcomes and improved patient and care team experiences, while lowering treatment costs, reducing the duration of hospital admissions, and enabling access to care.”)

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Guthart said price hikes aren’t on the table just yet.

“Given potential changes in our costs and our customers’ costs across their enterprise, we do not plan reflexive changes to our pricing in that dynamic, near-term environment,” he said. “Our second priority will be to optimize our production costs and rebalance product flows within our existing manufacturing and supply chain footprint as policies begin to stabilize. Finally, we will adjust our supply chain strategy and assess adjustments to our pricing when we see the signs of a durable planning environment for trade.”

Intuitive is assuming that retaliatory tariffs will go into effect after Trump’s 90-day pause lapses.

“We’ll see how that plays out,” Samath said. “…With respect to the manufacturing operations in our supply chain, to the extent that there are low-hanging fruit that isn’t disruptive to our partners and our employees, then of course we’ll pursue those. But I think our first move is to let things stabilize and evaluate then what’s possible. We’ll do that concurrently across the year, and we will consider things like: Do you have to invest to mitigate? What’s the time to receive the benefit? What’s the economic return of that?”

“There are complexities in some of the things that you might do from an operational perspective,” he continued, “so we don’t want to move too quickly, given how dynamic the environment is.”

Supply chain risk mitigation is ongoing

Intuitive President Dave Rosa said the device manufacturer’s supply chain team can apply many of its core strategies to deal with new import taxes.

“It’s really two frames of reference that you ought to use. One is thinking about the parts that are coming into our factories, the ones that we assemble. And then the other frame of reference are the parts that are leaving our factories,” he said. “… Our teams have been working to get to industrial scale for four years now, and so some of the processes that exist within this framework inside of Intuitive really center around assessing risk in all of our supply chain. We procure thousands of parts for our systems and and instruments. And so our teams look through there, assess the risk and then ensure appropriate mitigations are in place. [It’s] a robust process that runs on a daily basis.”

Those mitigations can include dual sourcing and building strategic reserves, Rosa said.

“If you look at our parts, our components and our products going to customers, we’ve done a lot of work to qualify some of our products under USMCA. We’ve optimized inventory around the globe ahead of some of these tariffs taking place,” he said. “And then if you look in the mid-term, we can use our existing manufacturing footprint that we have around the globe and optimize what products are manufactured in what area around the globe to help optimize some of the supply for our customers.”

“And then in the long-term, we can build our overall manufacturing footprint against the trade environment that ultimately stabilizes,” he continued. “That’s going to be a long-term way in which we help mitigate some of the supply risk, if you will, within our supply chains.”

Intuitive continues global manufacturing expansion

Intuitive is expanding its U.S. footprint, Samath said, with two new facilities that opened this year at its Sunnyvale, California headquarters: a 912,000-square-foot facility for da Vinci systems manufacturing and R&D, and a 315,000-square-foot facility for Ion manufacturing and R&D.

The company also recently expanded its Peachtree Corners site in Georgia where the company makes da Vinci X and da Vinci Xi systems.

And before the end of 2025, Intuitive plans to open manufacturing facilities in Germany and Bulgaria while expanding its instrument manufacturing capacity in Mexico, he said.

“In addition to supporting our growth plans, we believe over time these new manufacturing facilities give us supply availability, quality and cost advantages from scale and factory automation,” Samath said.

The company has added about 500 employees so far this year, with about half in manufacturing roles.

“Given long-term opportunities to drive the Quintuple Aim and grow revenue, our resolve to invest in R&D and innovation remain unchanged,” Samath said.

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