Nokia plans to acquire NXP’s Arizona semiconductor fab and convert it for indium phosphide optical chip production to support growing AI data-centre demand.
Nokia plans to acquire NXP Semiconductors’ semiconductor fabrication campus in Chandler, Arizona, to expand its optical component manufacturing capacity and meet rising demand from AI data centres.
The facility, which began operations in 2020 and currently supports RF gallium nitride (GaN) production, is scheduled to be repurposed for manufacturing indium phosphide (InP)-based optical communication chips. Nokia plans to begin leasing part of the site in early 2027, subject to regulatory approvals, before completing the acquisition of the full facility in the first quarter of 2029.
The move builds on Nokia’s expansion of its optical manufacturing capabilities following its acquisition of Infinera in February 2025. The deal gave Nokia access to an InP wafer fabrication facility in California and a packaging plant in Pennsylvania.
Nokia expects to begin ramping production at the California facility in late 2026. It is also expanding testing and packaging capacity at the Pennsylvania site by 10x, with the upgrade beginning in Q3 2026.
The Arizona acquisition will add US-based InP manufacturing capacity and strengthen Nokia’s in-house compound semiconductor capabilities. The company said the investment will help support growing demand for optical technologies driven by AI data-centre expansion while improving the resilience of the US technology supply chain.
