Nokia Announces Major Expansion of U.S. Semiconductor Advanced Test and Packaging in Pennsylvania to Bolster AI Growth

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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 United States. 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 $500M over the next five years.

Today, less than two percent 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, Nokia is increasing 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.

Nokia’s optical technologies provide advanced connectivity solutions for telecom networks to enable AI infrastructure and can reduce energy usage by as much as 75 percent. Nokia’s investment results in the domestic manufacturing of components used in AI infrastructure, creates new jobs, and significantly reduces energy usage in AI communications.

“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. It also reflects the strong partnership between Nokia, the United States, and the Commonwealth of Pennsylvania to support advanced manufacturing, create jobs, and strengthen U.S. technology leadership and global competitiveness,” said Justin Hotard, President and CEO of Nokia.

“Nokia is doubling down on the Lehigh Valley and ensuring that the future of chip production continues to run through this region because we’ve made smart investments to make Pennsylvania more competitive and proven that our Commonwealth is a great place to do business,” said Governor Shapiro. “As demand for semiconductors continues to grow across industries, we’ll continue to position Pennsylvania as a leader in innovation, with a supportive, thriving business climate that helps companies compete on a global scale. From advanced manufacturing to the research and development of new technology like advanced chip packaging, Pennsylvania has all the resources to be a world leader in chip production.”

“This is great news for Pennsylvania. Nokia is doubling its local workforce to more than 500 good-paying jobs in engineering, manufacturing, and R&D, all while expanding our ability to domestically produce the critical technologies that power AI infrastructure. This matters for both our economy and our national security,” said Senator Dave McCormick. “These technologies also help cut energy use in AI communications, showing that we can lead on innovation while also smartly managing our resources at the same time.”

“Nokia’s investment in Pennsylvania is directly advancing America’s AI leadership,” said Bill Frauenhofer, Executive Director of Semiconductor Investment and Innovation at the Department of Commerce. “Supported by CHIPS and Science Act funding, Nokia is deepening its commitment to innovation and the production of photonic chips in the United States. This project enables critical optical technology and strengthens America’s semiconductor supply chain.”

“Nokia’s latest investment is further proof that the Lehigh Valley is becoming a world leader in advanced manufacturing,” said U.S. Congressman Ryan Mackenzie. “With the help of our unparalleled, highly-skilled workforce, Nokia’s local expansion will help our region continue to drive innovation and build the tools behind next-generation technologies. Congratulations to Nokia and the hundreds of local workers who will benefit from this investment.”

The investment includes approximately $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. This 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. It is designed to bolster domestic supply chains for critical communications infrastructure, reinforce U.S. leadership in the technologies shaping the global AI economy and solidify Pennsylvania’s growing role as a hub for advanced manufacturing, telecommunications technology and AI infrastructure.