Ericsson has made good on its previously announced plans to build more wireless network gear in the United States. The vendor says a 300,000-square-foot factory will begin commercial operations early next year in Lewisville, Texas, less than 20 miles from its North America headquarters in Plano.

The Sweden-based vendor says the “smart factory” will produce 5G and advanced antenna radio systems for 5G deployments in North America with a special emphasis on industrial IoT. The company also aims to make the factory at least 28% more energy efficient than comparable buildings.

“This is a smart move from an economic, political, and especially in the [United States], technical perspective,” wrote Chris Nicoll, principal analyst at ACG Research, in response to questions. “Given the highly volatile nature of trade today, being a ‘local’ manufacturer provides some insulation from changing trade conditions and tariffs.”

Nicoll also noted that Kathrein, which has manufacturing facilities in the Dallas area already, was acquired by Ericsson earlier this year and this expansion could consolidate operations and assets into the larger Ericsson facility. “Dallas has a long history of being a radio technology hotbed of talent,” he said. “Every major vendor is there, including Huawei, so expanding your footprint there is one way to keep and attract top talent.”

U.S. manufacturing push

The new factory follows a multi-year effort by Ericsson to increase manufacturing in the United States, including the opening of a 5G ASIC design center in Austin, Texas; a collaborative IoT center and an artificial intelligence innovation hub in Santa Clara, California; a training facility in Lewisville for tower climbers; and a new radio network software research and development center in Austin. The company also produced 5G radios with Jabil in St. Petersburg, Florida during 2018.

“We continue to increase our investments in the [United States], so that we can more rapidly respond to customer demands, accelerating our pace of innovation and time to market for critical new products,” said Niklas Heuveldop, president and head of Ericsson North America, in a prepared statement. The new factory will also lead the way for “increased investments in smaller, nearshore manufacturing sites with unique mass customization capabilities and significant positive impact on sustainability and customer experience,” he added.

Ericsson’s new factory in Lewisville will rely heavily on automation and initially employ about 100 people, according to the company. All four nationwide U.S. network operators have deals with Ericsson for 5G equipment and those contracts will likely contribute to much of the work at the new facility, which intends to showcase and develop services for automated warehouses, assembly, packing and product handling, and connected logistics.

The vendor claims the new facility will be its first fully-automated smart factory in the world. Ericsson teased its increased U.S. production plans a few months ago but the location of the facility wasn’t announced until now. Earlier this month, the company also announced a $51.4 million investment to automate many operations at its existing factory in Nanjing, China.

Many countries including the United States, China, South Korea, Turkey, and the United Kingdom have stated a desire to lead in 5G, Nicoll explained. “Establishing manufacturing and [research and development] in key markets gets you political support as well as tapping into local market dynamics which are strong in the [United States],” he said.

He also describes the United States as the “most diverse 5G market in the world” with operators deploying new mobile services in low-, mid- and high-band frequencies, fixed wireless access and broadened coverage with technologies like massive mulitple-input, multiple-output. “This is the country to be in if as a vendor you want to be in the thick of 5G deployments and development,” Nicoll said.

Ericsson says it is investing about $100 million in the new factory. The vendor predicts 5G connections will account for roughly half of all mobile connections by 2023.