Nokia has announced a major expansion of its advanced test and packaging (ATP) operations in Allentown, Pennsylvania, strengthening domestic manufacturing of optical networking technologies that support the rapidly growing artificial intelligence (AI) infrastructure market in the United States.
The investment is expected to nearly double Nokia’s workforce in Pennsylvania to more than 500 employees across engineering, manufacturing, and research and development roles. The project is also forecast to generate an economic impact exceeding $500 million over the next five years, reinforcing Pennsylvania’s position as a key hub for semiconductor and advanced manufacturing innovation.
The expansion comes at a critical time for the U.S. semiconductor industry. Currently, less than 2 percent of global semiconductor advanced test and packaging activity takes place in the United States. Nokia’s Allentown facility is among the few domestic sites capable of advanced test and packaging of photonic chips into optical modules used in AI data centers and telecommunications infrastructure.
Through the deployment of new manufacturing equipment and an expanded production footprint, Nokia plans to increase production capacity at the facility by up to 10 times its current level. The additional manufacturing capacity is expected to become commercially available by the end of the third quarter.
Nokia said its optical networking technologies play a crucial role in enabling scalable AI infrastructure and next-generation telecom networks. The company’s solutions can reduce energy consumption in AI communications by as much as 75 percent, helping operators and enterprises improve efficiency while supporting growing AI workloads.
The investment package includes approximately $30 million from Nokia, supported by about $4 million in assistance from the Commonwealth of Pennsylvania and approximately $10 million through the federal CHIPS investment tax credit program. The expansion forms part of Nokia’s broader multi-year strategy to invest $4 billion in U.S. research, development, and manufacturing for AI-ready network connectivity.
Nokia President and CEO Justin Hotard said the AI-driven transformation of network infrastructure is creating new demands for high-performance connectivity. He noted that the Allentown expansion represents a strategic investment in domestic manufacturing capabilities that will support AI infrastructure growth while strengthening U.S. technology leadership and competitiveness.
The project is expected to enhance domestic supply chains for critical communications technologies, support the production of photonic chip-based optical solutions in the United States, and reinforce Pennsylvania’s growing role in advanced manufacturing, telecommunications technology, semiconductor packaging, and AI infrastructure development.
