Ericsson to build European next-generation smart manufacturing and technology hub

In May 2023, Ericsson announced it was working with operator Telia to transform the manufacturing industry in the Baltics with the launch of the region’s first enterprise 5G private network located at its Tallinn Supply Site, and setting its sights on leading innovation in Europe, the comms tech provider is building a next-generation smart manufacturing and technology hub in the city.

The 50,000-square metre green field facility is said be to the result of an investment valued at about €155m, which is expected to be operational in early 2026 and claimed to have sustainability and operational efficiency top of mind. 

The company’s plan is to consolidate all of its operations into a single smart hub that comprises test labs, warehouses, production lines and offices. It will be used for co-developing cellular ecosystems and production techniques mainly with customers and partners in Europe, but with global impact on industrialisation for volume production.

By establishing this European hub, Ericsson said it will enable a symbiotic relationship between its established R&D in Sweden and manufacturing, where product innovation extends into production and vice-versa. As a first step towards this goal, Ericsson, through its Estonian affiliate, has signed a definitive agreement to acquire property to build the facility, with the transaction expected to close in the fourth quarter of 2024, subject to agreed conditions.

The fully connected hub will be located in Ülemiste City in Tallinn, the largest business park and future-oriented urban area in the Baltics. The European hub is expected to be operational in early 2026, with Ericsson’s ambitions of it becoming LEED Gold-certified during the same year.

“This move is in line with Ericsson’s long-term strategy for a more resilient and sustainable supply chain, significantly reducing our carbon footprint and harnessing the power of 5G for smart manufacturing,” said Ericsson executive vice-president and head of networks Fredrik Jejdling.

“Our entire production landscape globally is being digitised and, as we have done in the US, this will strengthen the link between our R&D and new product introduction to ensure every product we manufacture not only benefits our customers, but is also produced with as low an environmental impact as possible.”

The new hub is also expected to reduce Ericsson’s carbon emissions by up to 70% compared with all four existing facilities in Tallinn. It will support Ericsson’s 2030 target to be net-zero in its own operations through highly sustainable and energy-efficient design including the use of low embodied carbon wooden glulam beams, ensuring structural strength while minimising environmental impact, and a solar farm on the roof.

Ericsson said that by upgrading existing 4G sites to 5G, CSPs can increase their network capacity by up to 10 times, while reducing energy consumption by more than 30%.

Ericsson has currently more than 2,200 employees in Estonia, including engineers and experts in artificial intelligence (AI) and machine learning. The existing factory plays a strategic role in Ericsson’s global supply footprint, accounting for more than 40% of the industrialisation of Ericsson 5G products.

“We are committed to being at the forefront of sustainable operations in Europe as we revolutionise our manufacturing process jointly with our partners and customers, and support the scale-up of 5G deployment,” said Jejdling.

“This smart hub will be powered by 100% renewable electricity and built with optimal efficiency through AI, machine learning, robotics and other advanced Industry 4.0 technologies. In addition, we aim to attract local and European talent by creating an environment that fosters collaboration, innovation, employee wellbeing, diversity and inclusion.”

Tiit Riisalo, minister of Economic Affairs and Information Technology of Estonia, added: “Ericsson’s decision to establish a high-tech, smart manufacturing and technology hub in the forward-looking Ülemiste City stands as a prime illustration of the economy’s next generation for Estonia.

“It serves as a concrete demonstration of Estonia’s commitment to the green transition, our robust ties to emerging technologies and the creation of an ecosystem that fosters innovation for other companies as well.”