Dive Brief:
- Ericsson’s investments in its 300,000-square-foot U.S. factory will help deter the impact of supply chain disruptions, including potential new tariffs under President Donald Trump, executives said on a Jan. 24 earnings call.
- The telecommunications company injected $50 million into the Lewisville, Texas, plant over the last two years, including a 27,000-square-foot expansion in 2023, per Ralf Bagner, Ericsson’s head of media relations.
- “Today near 100 per cent of new basebands and radios for larger operators in the USA are coming from our factory in Texas,” Bagner told Supply Chain Dive in an email.
Dive Insight:
Ericsson opened its U.S. factory, which manufactures 5G and advanced antenna system radios, in 2020 to prepare for a changing geopolitical situation, according to President and CEO Börje Ekholm. The facility also aids the move from a cost-optimized supply chain to one built on resilience, he added.
“You need to factor in resilience in the supply chain, and that’s why we built up the U.S. factory,” Ekholm said on the earnings call, adding the company is investing to increase capacity throughout North America.
The company has primary production operations in the U.S., Brazil, Mexico, India, China, Poland, Malaysia and Estonia, according to Bagner. He added that Ericsson is “continuously investing in supply chain resilience” but did not offer details about future investment plans.
A diverse global production footprint provides the company with flexibility in the face of potentially higher import duties, CFO Lars Sandström said on the earnings call.
“So, we have pretty broad-based production capacity that we are utilizing,” Sandström said. “And we have the opportunity to move production between the different sites, both in our internal but also with the external manufacturing sites that we have.”
Sandström added that Ericsson has the “opportunity to work with the supply chain” depending on the Trump administration’s changes to U.S. trade policy.
Trump said last week he plans to implement tariffs promised during his election campaign as soon as Feb. 1. The president’s comments came a day after he called for a review of U.S. trade policy by federal agencies.
“I think we are all waiting a little bit to what is going to happen there,” Sandström said, noting that there could be some product exemptions to any new import duties. “But we are working on that continuously trying to balance and utilize the system we have.”
