- Nokia is investing $4B to expand U.S. manufacturing and R&D
- This shows Nokia is serious about the “AI super cycle,” said Dell’Oro’s Jimmy Yu
- The move could be a boon for Nokia’s Nvidia deal and its BEAD plans
Nokia plans to sharpen its stateside manufacturing and R&D toolkit, announcing today it’s investing $4 billion to expand those operations in the U.S.
Specifically, $3.5 billion will go towards U.S. R&D for “all facets of the network, including mobile, fixed, IP, optical, data center networking technologies, and mission-critical/defense solutions,” per a press release. Nokia also expects to spend roughly $500 million on manufacturing and R&D sites in Texas, New Jersey (where Nokia Bell Labs is headquartered) and Pennsylvania.
But why now? Well, it’s not too surprising given all that has happened since CEO Justin Hotard took the reins, from Nokia’s $1 billion Nvidia deal to the company’s plans to revamp its strategy and operating model.
Nokia doubles down on ‘AI super cycle’
Nokia execs have said they’re focusing on the “AI super cycle,” said Dell’Oro Group VP Jimmy Yu, “and the U.S. is the epicenter.”
“I think Nokia is signaling a couple of things to the market,” he told Fierce. “The first is that the company is serious about the AI super cycle and is heavily investing in it. The second is that Nokia is investing in the U.S. and expanding its presence here.”
The latter point will likely jibe well with Nvidia’s focus on having 6G “made in America.” When Fierce asked Nvidia CEO Jensen Huang why it chose Nokia instead of a vendor with a larger U.S. footprint (i.e., Ericsson), he noted “a lot of it is just chemistry.”
More manufacturing also spells out more capacity to take on mega connectivity needs.
At Broadband Nation Expo this week, David Eckard, head of strategy at Nokia’s Fixed Networks unit, noted while fiber and optical technology show plenty of promise for AI and data centers, scale is a key challenge.
“The network has to be able to scale out. It’s no longer just putting one or two fibers between data centers,” he said. “It’s now hundreds if not thousands of fibers.”
The BEAD angle
As the Broadband Equity, Access and Deployment (BEAD) program finally starts moving along, that might be another incentive for Nokia to step up its U.S. manufacturing. Nokia already has a plant in Wisconsin where it's making optical line terminals (OLTs) and optical network terminals (ONTs) for BEAD projects.
Assuming NTIA approves the remaining state BEAD plans in a timely manner, “that’s going to put a lot of pressure on the supply chain,” said Elizabeth Bowles, CEO of Aristotle Unified Communications, at a BBNE panel about the program's hurdles.
Craig Culwell, CommScope’s director of North America Broadband Sales, said on that panel “it’s going to take a lot of collaboration between the suppliers, between the distribution partners, to really work things out and get creative on how we supply everybody.”