Ericsson has set its sights on
leading innovation in Europe by building a next-generation smart manufacturing
and technology hub in Tallinn, Estonia. The new facility, a green field
investment valued at about EUR 155 million (USD 169 million), has
sustainability and operational efficiency top of mind.
The plan is
to consolidate all of Ericsson’s operations in Estonia into a single,
state-of-the-art, 50,000 sq m 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 a global impact on industrialization for volume production.
According to a statement just
released, by establishing this European hub, Ericsson 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 this smart hub 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 new European hub is
expected to be operational in early 2026, with Ericsson’s ambitions of it
becoming LEED* Gold-certified during the same year.
Fredrik
Jejdling, Executive Vice President and Head of Networks, Ericsson, says: “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. Our entire production landscape globally is being
digitalized and, as we have done in the U.S., 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 are also produced with as low
environmental impact as possible.”
The new
European hub is expected to reduce its carbon emissions by up to 70 percent
compared to 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 minimizing environmental impact, and a solar farm on
the roof.
Ericsson is
also supporting communications service providers (CSPs) in their Net Zero
journeys with the most energy-efficient portfolio in the market. 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 percent.
“We are committed to being at the forefront of
sustainable operations in Europe as we revolutionize our manufacturing process
jointly with our partners and customers, and support the scale up of 5G
deployment,”
Jejdling says. “This smart hub will be
powered 100 percent by 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.”
Ericsson has
currently more than 2,200 employees in Estonia, including engineers and experts
in AI and machine learning. The existing factory plays a strategic role in
Ericsson’s global supply footprint, accounting for more than 40 percent of the
industrialization of Ericsson 5G products.
Tiit Riisalo,
Minister of Economic Affairs and Information Technology of Estonia, says: "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."