Nokia Expands US Operations to Boost Photonic Chip Output

Nokia announced an expansion of its advanced test and packaging operations in the US state of Pennsylvania. This should scale production of optical networking technologies that underpin AI infrastructure.

The Finnish vendor stated that the investment will increase the facility’s production capacity by up to 10 times its current level, with the extended capability expected to be commercially available by the end of Q3. Nokia said the expansion in Allentown, Pennsylvania, is expected to nearly double the workforce there to more than 500 across engineering, manufacturing and R&D, with a projected economic impact of more than $500 million over the next five years. It noted that the Allentown site is one of only a few facilities in the US providing advanced test and packaging of photonic chips into optical modules for use in AI and telecoms infrastructure.

Nokia stated that less than 2% of global semiconductor advanced test and packaging currently takes place in the US, making domestic capacity a strategic priority. The company claimed its optical technologies can reduce energy usage in AI communications by as much as 75%. The expansion is part of Nokia’s multi-year plan to invest $4 billion in research and manufacturing in the US for AI-ready network connectivity.

The Allentown project involves approximately $30 million in total investment, including around $4 million in assistance from the state of Pennsylvania and approximately $10 million in federal CHIPS and Science Act tax credit. Nokia CEO Justin Hotard said that the AI supercycle is fundamentally reshaping network and infrastructure requirements and noted the Allentown expansion was a direct investment in that future. “It also reflects the strong partnership between Nokia, the United States, and the Commonwealth of Pennsylvania to support advanced manufacturing, create jobs, and strengthen US technology leadership and global competitiveness,” he said.