US firms confident they can bring radio manufacturing home
"Made in America" is the rallying cry for those who want products sold in the US to be manufactured there. When it comes to the radios used in today's mobile networks, that leaves a big gap: Ignoring Ericsson and Nokia, nearly all of today's manufacturing happens in Asia. If the US is to replace China's Huawei in its rural networks, it has a lack of alternatives with US facilities to the Nordic vendors.
But software specialists in the US radio market are now confident the problem can be overcome. Both Mavenir and Parallel Wireless, two firms behind the movement for more "open" radio access networks, are optimistic that production can be shifted economically if authorities stipulate it must happen on US soil.
Mavenir is now driving an effort to set up US production facilities in the next nine months to a year. It currently works mainly with a Taiwanese manufacturer called MTI but says most of the design expertise comes from the US, including semiconductor firms such as Texas Instruments and Xilinx. Under its scheme, those designs could be transferred to a US manufacturer or a foreign company with a US presence. One possibility is Foxconn, says John Baker, Mavenir's senior vice president of business development. Also Taiwanese, Foxconn has been setting up a new facility in Wisconsin – although it is reportedly well behind schedule.
Baker brushes off concerns about the cost of moving production from low-cost labor markets to the US. "Given the US market commands a slightly higher premium than the rest of the world, the market should be able to bear that short term until things like automation kick in," he says.
While the use of automation could limit any job opportunities in US radio manufacturing, Ericsson has already set a precedent for building a US factory to serve US demands. Based in Texas, its highly automated "smart factory" employs just 100 people and may have little need for additional staff. "We can supply all of the North American demand with only 100 employees in Texas," Ericsson CEO Börje Ekholm was reported to have told an audience at the World Economic Forum in Davos earlier this year.
An alternative to using a different manufacturer would be to lure the same Asian producers to the US. "If the FCC's billions of dollars to swap Huawei equipment – if they said this had to be made in the US – the resources would be mobilized and at most it would be 10% more expensive," says Steve Papa, the CEO of Parallel Wireless, after US authorities recently proposed spending $2 billion on a Huawei swap-out in rural US networks. A rival to Mavenir, Parallel Wireless counts South Korea's KMW as one of its main hardware partners. "KMW could move production to the US fairly easily," Papa insists. "It will cost a little more."
Persuading MTI to do the same could appeal to Mavenir. "That is where we have the majority of our focus, because they have the largest open RAN set of radios and are part of the Facebook Evenstar project, and we are working with them on that $1,000 radio that is now getting ready to come to market," says Baker. Announced in February, the Evenstar project aims to commercialize a radio costing just one third of the normal fee by the second half of this year.
Simplification of radios and heavy reliance on software should help to minimize costs, says Baker. "The complexity of radios has come down to common boards and common chipsets and there is a lot of software in these radios," he explains. "I think it comes down to how much some of these component makers can bring more value into their production processes."
The update on activities comes several weeks after Mavenir highlighted the lack of "Made in America" radios during a presentation to the FCC. In its slides, the company pointed out there were currently "no US-manufactured radios." America has the design skills, it insisted. What's missing is any "low-cost US-managed volume manufacture." If its plans come to fruition, that gap should soon disappear.
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— Iain Morris, International Editor, Light Reading