Ericsson is taking the next step in its previously announced plans to begin building some of its infrastructure equipment in the United States.

The Sweden-based vendor said it plans to build its first fully-automated smart factory in the U.S. That factory will employ around 100 people and focus on producing radio systems with integrated radio access network (RAN) compute baseband functionality to support 4G LTE and 5G deployments.

The factory will plug into Ericsson’s already established global supply chain that provides network equipment to customers in Europe, Asia, and the Americas. The vendor cheekily noted that it does this by “securing fast and agile deliveries to meet customer requirements.” Any term associated with “secure” has become increasingly important for telecom equipment providers looking to supply equipment to western countries.

Despite touting the advanced nature of its factory and the fact that it will be “operational in early 2020,” Ericsson has not yet said where that factory will be. In its most recent statement, the vendor noted that the “location will be announced upon concluding discussions with state and local authorities.”

Fredrik Jejdling, executive vice president and head of networks at Ericsson, said in a prepared statement that the move concludes “months of preparations.”

William Ho, founder and principal analyst at 556 Ventures, said the deal was a good logistical move for Ericsson.

“It’s a good thing because someone has done a business plan and realized that being closer to their customers is a good thing,” Ho said. “It also helps them get around any political risk about security or supply chains from sourcing parts from other parts of the world.”

Daryl Schoolar, principal analyst at Ovum, cited a recent report that showed Ericsson manufactures 45% of its equipment in China compared to only 10% for its Nordic rival Nokia. Schoolar also noted that South Korea-based Samsung is not believed to produce any of its base stations in China.

“The Trump administration has started considering blocking the use of all 5G equipment manufactured in China, not just kit made by domestic China vendors,” Schoolar wrote in an email. “Of the three major RAN kit providers, Ericsson appears to be the most vulnerable if this happens.”

Ericsson initiated the move last August. Niklas Heuveldop, president and CEO of Ericsson North America, at that time told SDxCentral that the plan puts company resources and innovation closer to important customers in one of Ericsson’s largest markets. He noted that the U.S. had accounted for at least 25% of the vendor’s overall sales for the previous 7 years.

“I’ve been impressed with the activity in the U.S., especially with IoT and industrial IoT,” Heuveldop told SDxCentral. “And there’s a lot of excitement in the investment community as well. The U.S. is on fire.”

Ericsson has struck 5G deals with a handful of North America operators, including Verizon, AT&T, T-Mobile US, Sprint, and Rogers in Canada. The vendor is also working with smaller domestic players like U.S. Cellular, which plays into a deeper issue surrounding rural operators working with China-based vendors like Huawei and ZTE.

Ericsson said it did begin providing radios for the U.S. market that were manufactured by a production partner by the end of last year. Heuveldop previously cited work with Jabil that has a facility in St. Petersburg, Florida.

The vendor has also set up a new research and development center focused on software in Austin, Texas. That location is close to its Austin ASIC Design Center that opened in late 2017. In its previous statement, Ericsson said it plans to hire more than 200 engineers at that software facility.

Schoolar noted that those hiring plans are also playing into a broader move toward bringing higher-value, lower-labor manufacturing jobs to the U.S.

“The type of manufacturing Ericsson will be doing takes place using sophisticated machinery that requires workers with higher-level of technology know how than what we have traditionally associated with manufacturing,” Schoolar explained. “The people filling those jobs are not the folks going straight from high school to factory, but instead have spent at least two years post high school getting a technical degree. And, of course the products themselves – advanced antenna and radio systems are very sophisticated as well.”

Ericsson's manufacturing plans also got a bump from Federal Communications Commission Chairman Ajit Pai, who noted in a statement that the move was "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."

The supply channel expansion comes as more service providers are looking at increasing their presence in the space that could pressure traditional equipment vendors. SK Telecom and Deutsche Telekom earlier this week announced a joint venture to develop 5G technologies, including a 5G repeater, in-building equipment, and technologies for media transport and low-latency media streaming.

“Telcos are taking more control over their own destiny,” Chris Antlitz, principal analyst at Technology Business Research, told SDxCentral in an interview about that JV.