Nokia announced a major expansion of its advanced test and packaging (ATP) operations in Allentown, Pennsylvania, to bolster the domestic production of optical networking technologies powering AI infrastructure. The investment is expected to nearly double Nokia's Pennsylvania workforce to more than 500 jobs in engineering, manufacturing, and R&D, generating a projected economic impact of more than $500M over the next five years. This strategic move aims to strengthen US domestic production capabilities for critical components used in AI-native networks, offering lower power consumption and greater operational efficiency.

The expansion involves an investment of approximately $30 million from Nokia, supplemented by bipartisan support including approximately $4 million in assistance from the state of Pennsylvania and approximately $10 million in federal CHIPS investment tax credit. By investing in new manufacturing equipment and expanding its footprint, Nokia is increasing the site's production capacity by up to 10 times its current level. The new capacity is expected to be commercially available by the end of the third quarter.

Nokia's Allentown facility is one of the few in the US providing ATP of photonic chips into optical modules for AI and telecom infrastructure. Currently, less than two percent of global semiconductor ATP takes place in the US. Nokia's optical technologies can reduce energy usage by as much as 75 percent, supporting the development of energy-efficient AI communications infrastructure.

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This initiative is part of Nokia's multi-year plan to invest $4 billion in R&D and manufacturing in the US for AI-ready network connectivity. The project is designed to reinforce US leadership in the global AI economy and solidify Pennsylvania's role as a hub for advanced manufacturing and telecommunications technology.

"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.

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