Ericsson to expand U.S. manufacturing, R&D efforts to support 5G

Ericsson booth
Ericsson is one of the world's largest mobile network equipment vendors. (Monica Alleven/Fierce Wireless)

Ericsson announced it will expand its R&D and manufacturing efforts in the United States ahead of the launch of 5G services here. “The United States is our largest market, accounting for a quarter of Ericsson’s business over the last seven years,” explained Ericsson CEO Börje Ekholm in a release. “To serve the demand of these fast-moving service providers, we are strengthening our investment in the U.S. to be even closer to our customers and meet their accelerated 5G deployment plans.”

However, details of Ericsson’s exact manufacturing plans remain somewhat fuzzy. Ericsson's Fredrik Jejdling, head of the company's Business Area Networks, said Ericsson would begin manufacturing 5G products including 5G radios in the United States starting later this year, initially through production partner Jabil, and that the first products from that effort would be available before 2019. He added that the plant would be in St. Petersburg, Florida.

But Jejdling declined to say how many people would be involved in the manufacturing effort and how it might compare with Ericsson's other manufacturing plants in terms of size. 

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Jejdling did say that Ericsson's main manufacturing operations are located in Estonia and China, and that the company's manufacturing operations globally are a mix of Ericsson-owned plants and ones that the company operates through partners. He said in the United States Ericsson would initially build radios and would then consider whether it would expand that into other product areas.

As for Ericsson’s R&D expansion in the United States, the company said it will open a new software development center with baseband focus in 2018, employing more than 200 software engineers once fully operational. And, separately, the company said plans to employ around 100 “specialists” in North America by the end of 2018 who will focus on AI to “accelerate automation, examine product road maps and explore new business opportunities.”

Ericsson’s R&D efforts will sit in addition to its ASIC Design Center in Austin, Texas, that Ericsson opened late last year that the company said will ultimately employ 80 people.

Ericsson’s announcement appears geared toward furthering its momentum in the United States as well as dovetailing with the Trump administration’s push toward creating more jobs in the country.

The issue is key for Ericsson, and the company’s announcement is also timely considering Ericsson appears to be gaining at least some edge over its competitors. Nokia last month admitted that the company lost a "small number" of Verizon's markets but argued that the company is not losing share to rivals in its critical North American market. That news The statements followed an announcement by Ericsson that it recently won additional markets from Verizon, and a separate announcement from Samsung that it would supply equipment for Verizon's launch of 5G in Houston.

Moreover, Ericsson widened its lead over Nokia in the North American mobile infrastructure market during the first quarter, according to the analyst team at Dell'Oro Group.

Ericsson in the second quarter reported that it has made progress in its effort to regain its financial footing—and that North American network operators are playing a major role in that effort.

Article updated Aug. 10 with additional information.