Fresh off winning a major 5G hardware supply contract with Verizon, Ericsson announced today that it is increasing its investments in the United States to speed deployments of 5G, AI, and automation technologies in North America. Under the plan, Ericsson says that it will hire more U.S. personnel for its R&D and manufacturing initiatives, as well as shortening timelines between new products’ introduction and delivery to customers.
“The United States is our largest market,” explained Ericsson CEO Börje Ekholm, “accounting for a quarter of Ericsson’s business over the last seven years. 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.”
On the R&D side, Ericsson says it will expand the work of a recently opened 5G chip design center in Austin, Texas, as well as opening a new baseband software development center this year, collectively supporting nearly 300 employees. Both facilities will release 5G products for U.S. and global use starting in 2019.
Ericsson will also employ 100 people in North America to focus on AI and automation R&D initiatives, though their work appears to be somewhat speculative. According to the company, they will “work on utilizing AI technologies to accelerate automation, examine product road maps, and explore new business opportunities,” including the promotion of potentially disruptive innovations.
Interestingly, Ericsson is also committing to begin manufacturing 5G products in the United States starting in the fourth quarter of 2018. Beyond establishing a team specifically to create U.S.-ready hardware, the company says it will create “volume production” of next-generation 5G radios, working with a production partner to build its U.S. radios in the country “before the end of 2018.” The same facility will be used to quickly produce future products for U.S. customers, as well.
Today’s announcements are significant for a few reasons, not the least of which is Ericsson’s apparent embrace of a U.S.-focused 5G product strategy. While the company is based in Sweden, neighboring European regulators and carriers have struggled to coordinate 5G service rollouts across multiple countries, despite rapid progress by U.S. chipmakers and carriers to launch 5G this year. An increased U.S. presence will certainly help Ericsson work with Verizon, while also improving its proximity to AT&T, which has been testing 5G equipment — including Ericsson gear — at a lab in Austin.
The move may also bolster Ericsson’s domestic bona fides at a time when the United States is shunning Chinese 5G network hardware makers over national security concerns. While U.S. carriers have no purely domestic network hardware maker to choose from, Ericsson’s commitments to opening additional facilities on U.S. soil will likely increase the company’s trustworthiness in the eyes of U.S. regulators.