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Ericsson to boost R&D investment, start manufacturing in US

Telefonaktiebolaget LM Ericsson (publ) said Aug. 10 that it will bolster its research and development investments to speed up 5G deployment in the U.S. and will begin manufacturing in the country by the fourth quarter of 2018 to quicken product delivery.

The telecom equipment manufacturer plans in 2018 to open a new software development center with a focus on baseband, which will house more than 200 software engineers.

This move follows the opening of the 1,400-square-meter Austin ASIC Design Center in Texas in late 2017 that focuses on core microelectronics of 5G radio base stations, which will help speed up 5G commercialization.

Starting in 2019, both facilities will launch 5G products and software features for the U.S. and global markets.

The company will also increase its artificial intelligence and automation investments, with plans to hire 100 specialists in North America by the end of 2018.

Ericsson said it will begin manufacturing in the U.S. in 2018 "to make 5G products available as fast as possible" in the country and produce next-generation radios.

The company will also hire a team focused specifically on introducing products to the U.S. market. It plans to start out working with a production partner and is aiming to produce the first batch of radio products for the U.S. market before the end of 2018.

Ericsson President and CEO Börje Ekholm noted that the U.S. is Ericsson's largest market, accounting for a quarter of its business over the last seven years. In the second quarter of 2018, when the company posted a wider net loss, the U.S. contributed to 30% of its net sales. The company expects 5G subscriptions to hit 150 million, accounting for 48% of all mobile subscriptions in North America, by the end of 2023.

On July 27, Fitch Ratings lifted its outlook on Ericsson to stable, citing increased research and development expenditure and improving financial performance, among other factors.