Yesterday, Nokia announced a major expansion of its advanced test and packaging (ATP) operations in Allentown, Pennsylvania. The investment will increase domestic production capacity of the optical networking technologies that power scalable AI infrastructure connectivity across the U.S.
The expansion is expected to nearly double Nokia’s Pennsylvania workforce to more than 500 jobs in engineering, manufacturing and R&D, while generating a projected economic impact of more than $500 million over the next five years. The project is expected to create more than 250 new jobs over the next three years and retain 308 full-time positions.
According to the company, less than 2% of global semiconductor ATP takes place in the U.S.
Nokia’s Allentown facility is one of only a few in the U.S. providing ATP of photonic chips into optical modules for use in AI and telecom infrastructure. Through investment in new manufacturing equipment and an expanded manufacturing footprint, the company hopes to increase the site’s production capacity by up to 10 times its current level, with new capacity expected to be commercially available by the end of the third quarter.
The optical technologies provide advanced connectivity solutions for telecom networks to enable AI infrastructure and can reduce energy usage by as much as 75%.
“The AI supercycle is fundamentally reshaping network and infrastructure requirements in the U.S. and globally. Our expansion in Allentown is a direct investment in that future—scaling domestic manufacturing of the optical networking technologies that power AI infrastructure,” said Justin Hotard, president and CEO of Nokia.
The investment includes some $30 million from Nokia, which includes bipartisan support of approximately $4 million in assistance from the state of Pennsylvania and approximately $10 million in federal CHIPS investment tax credit.
Nokia received a funding proposal for a $3.2 million grant and is eligible for at least $129,500 through the Manufacturing Tax Credit Program, according to the governor's office.
The expansion is part of Nokia's multi-year plan to invest $4 billion in R&D and manufacturing in the U.S. for AI-ready network connectivity.
