Nokia announced an expansion of its advanced test and packaging (ATP) operations in Allentown, Pennsylvania, with approximately $30 million in total investment, which includes about $4 million in state assistance and approximately $10 million in federal CHIPS Act investment tax credits.

The Allentown facility, one of a small number of U.S. sites producing ATP of photonic chips into optical modules, will increase production capacity by up to 10 times its current level. New capacity is expected to be commercially available by the end of the third quarter of 2026.

Nokia said the expansion is expected to nearly double its Pennsylvania workforce to more than 500 jobs in engineering, manufacturing, and research and development, with a projected economic impact of more than $500 million over the next five years.

According to the press release, less than 2% of global semiconductor ATP currently takes place in the U.S. Nokia's optical technologies are used in telecom networks supporting AI infrastructure and, the company claims, can reduce energy usage by as much as 75%.

"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 Department of Commerce's Bill Frauenhofer noted the project is supported by CHIPS and Science Act funding and said it "strengthens America's semiconductor supply chain."

The Allentown expansion is part of Nokia's previously announced multi-year plan to invest $4 billion in U.S. research, development, and manufacturing focused on AI-ready network connectivity.