Ericsson pledges $100M to build smart factory in U.S.

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Ericsson said the location for the new smart factory will be announced after it concludes discussions with state and local authorities. (Fierce Wireless)

The exact location has yet to be determined, but Ericsson said it plans to build its first fully automated smart factory in the U.S. that will produce advanced antenna system radios for 5G deployments in North America.

Ericsson’s direct investment is about $100 million, which will kick in during the third quarter of this year, the company told FierceWireless. The Swedish vendor said the radios will be designed to boost network capacity and coverage, including in rural areas, as well as 5G radios for urban areas.

The news earned accolades from the chairman of the Federal Communications Commission. “I applaud Ericsson for today’s announcement that the company will build a new factory in the United States that will open in early 2020 and produce 5G radios,” said Chairman Ajit Pai in a statement. “Building 5G equipment in the United States is good for our economy, good for the supply chain, and good for the rapid rollout of the next generation of wireless connectivity in the United States.” 

Ericsson last year announced that it was going to increase its investment in the U.S. market as part of a strategic initiative for the company to operate closer to its customers. At that time, it was working with production partner Jabil in St. Petersburg, Florida, where its first products were to be produced by the end of 2018.

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It appears that relationship will end with the opening of the new plant. “Ericsson has worked initially with a production partner in order to bring the first radios for the U.S. at the end of 2018,” the company said in a statement. “Now we are taking a next step by establishing our first fully-automated smart factory, which will be up and running in early 2020. It will take over all production activities in the U.S.”

Today’s announcement is timely in that it dovetails with reports that U.S. officials are in conversations with companies about their ability to move production of next-generation network gear outside of China. Ericsson declined to comment on those talks, but a spokeswoman told FierceWireless that the company’s supply chain is flexible, and it has production facilities on all continents so it’s not reliant on any one geography.

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Ericsson said the location for the new smart factory in the U.S. will be announced after it concludes discussions with state and local authorities.

“We continue to focus on working closely with our customers and supporting them in the buildout of 5G globally and in North America,” said Fredrik Jejdling, executive vice president and head of Networks at Ericsson, in the press release. “With today’s announcement, we conclude months of preparations and can move into execution also in the U.S. In addition, we are digitalizing our entire global production landscape, including establishing this factory in the U.S. With 5G connectivity we’re accelerating Industry 4.0, enabling automated factories for the future.”

Ericsson expects initially to employ about 100 people at the facility, which will have highly automated operations, as well as a modular and flexible production setup to enable quick ramp-up and rollout.