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Ericsson puts €150M for a new smart manufacturing and R&D hub in Estonia

Ericsson, the communication technology giant, is set to make Estonia the next-generation smart R&D & manufacturing hub of its European operations with a €150M investment.

In a significant move, Ericsson, a leading global provider of communication technology and services from Sweden, has announced plans to establish a state-of-the-art smart manufacturing and technology hub in Estonia. The facility, valued at approximately €155M, will serve as a key centre for Ericsson’s smart manufacturing operations in Europe. It will be located in Ülemiste City, Tallinn, further diversifying the economy of Baltic’s biggest business campus.

Global impact and strategic positioning

The vision is to consolidate all of Ericsson’s operations in Estonia into a single, cutting-edge facility spanning 50,000 square meters. This hub will house test labs, warehouses, production lines, and offices, serving as a collaborative space for co-developing new cellular ecosystems and production techniques. Ericsson’s aim is to work closely with customers and partners in Europe while also making a global impact on industrialisation.

By establishing this hub, Ericsson aims to create a symbiotic relationship between its renowned research and development capabilities in Sweden and manufacturing. This integration will ensure that product innovation seamlessly extends into production and vice versa, fostering a holistic approach to technology advancement.

As a first step towards this ambitious project, Ericsson’s Estonian affiliate has signed an agreement to acquire property for the smart hub. The transaction is expected to close in the fourth quarter of 2024, subject to agreed conditions.

Located in Ülemiste City, the fully connected hub will become operational in early 2026. Ericsson aspires to achieve LEED Gold certification for the hub in the same year, demonstrating its commitment to sustainability and environmental responsibility. Ülemiste City already hosts almost 500 companies, including Skeleton Technologies, Fujitsu, Playtech, and many others, including Invest Estonia’s main office.

Long-standing friendship and collaboration

Invest Estonia and Ericsson have a long history of collaboration. In 2020, Ericsson Estonia was awarded the Foreign Investor of the Year award due to its contribution to the engineering scene. Invest Estonia has also been helping Ericsson source a skilled workforce and relocate foreign talents to Estonia, as its Innovation Hub is employing over 2,200 professionals from 55 nations, including experts in AI and machine learning. Ericsson’s existing factory plays a crucial role in the company’s global supply footprint. This new project could further strengthen the relationship, as Sweden and Estonia also strengthen their ties on the highest level.

Fredrik Jejdling, Executive Vice President and Head of Networks at Ericsson, expressed enthusiasm for the new move and upcoming development, stating, “This expansion aligns 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. By digitalising our global production landscape, we strengthen the link between R&D and new product introduction, ensuring that every product we manufacture benefits our customers and minimises environmental impact.”

 New hub renders

Ericsson’s hub in Tallinn is projected to reduce carbon emissions by up to 70 per cent compared to the collective emissions of the four existing facilities. This achievement will support Ericsson’s goal to achieve Net Zero in its own operations by 2030. The hub’s design will incorporate highly sustainable and energy-efficient features, including the use of low embodied carbon wooden glulam beams and a solar farm on the roof.

“Our commitment to sustainable operations in Europe drives our efforts to revolutionise the manufacturing process in collaboration with our partners and customers and support the scale-up of 5G deployment,” Jejdling stated. “This smart hub will be powered entirely by renewable electricity and will leverage AI, machine learning, robotics, and other advanced Industry 4.0 technologies to optimise efficiency. Additionally, we aim to attract local and European talent by creating an environment that fosters collaboration, innovation, employee well-being, diversity, and inclusion.”

Tiit Riisalo, the Minister of Economic Affairs and Information Technology of Estonia, hailed Ericsson’s decision to establish the smart manufacturing and technology hub in Ülemiste City. Riisalo emphasised that it exemplifies Estonia’s commitment to the green transition, its strong ties to emerging technologies, and the creation of an innovation ecosystem that benefits not only Ericsson but also other companies.

With the forthcoming establishment of this cutting-edge hub, Estonia has reinforced its position as an R&D hub for the next-gen manufacturing. The country just recently welcomed the groundbreaking ceremony for another pivotal project, a world-leading magnet factory in Narva by Canadian company Neo Performance Materials. Capitalising on its strategic location in Europe, quality of talent and focus on innovation and sustainability, Estonia continues to attract major investments in advanced manufacturing.

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