Demand for artificial intelligence (AI) has prompted Finnish telecom equipment maker Nokia to invest $30 million to expand advanced test and packaging operations in the United States.
The investment will take place at Nokia's Allentown facility in Pennsylvania to boost US production of optical networking chips used in artificial intelligence infrastructure, the company said.
Nokia said the expansion will increase production capacity for photonic chips by up to 10 times and nearly double its Pennsylvania workforce to more than 500 jobs in engineering, manufacturing and research and development (R&D).
The project will generate an economic impact of more than $500 million over the next five years, Nokia said. New capacity is expected to be commercially available by the end of the third quarter.
The investment totals about $30 million from Nokia and includes about $4 million in assistance from Pennsylvania State and about $10 million in federal CHIPS Act tax credits.
The expansion is part of Nokia's multi-year plan to invest $4 billion in US R&D and manufacturing for AI-ready network connectivity in connection with the US government plan to boost domestic manufacturing.
At present, less than 2% of global semiconductor advanced test and packaging, or ATP, takes place in the US. Nokia's Allentown site is one of only a few US facilities providing ATP of photonic chips for AI and telecom infrastructure.
Nokia said that its optical technologies can reduce energy usage by as much as 75%.
In overnight trading on NYSE, shares of Nokia were up 1.22%, changing hands at $14.15, after closing Tuesday's regular session 5.67% lower.
