Infinera announced up to $93 million in federal funding to expand operations, including in the Lehigh Valley.
“Infinera has been a significant part of the extensive semiconductor sector in the Lehigh Valley that goes back to the development of the transistor by Bell Labs and Western Electric,” said Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corporation. “Lehigh Valley was the original Silicon Valley, and many of the talented engineers and developers remain here. The federal government’s effort and investment through the CHIPS Act to increase domestic chip production has led to several new projects in the Lehigh Valley including the expansion of Infinera. The region is in a prime position to help America meet its objective to reclaim leadership in the production of semiconductors and other critical technologies.”
The Department’s award of up to $93 million will support the construction of a new fab in San Jose, California, and a new advanced test and packaging facility in Bethlehem, Pennsylvania, and is expected to increase Infinera’s existing domestic manufacturing capacity by an estimated factor of 10. Infinera is a vertically integrated photonic semiconductor and telecommunications equipment manufacturer that has operated its U.S. fabrication and advanced test and packaging facilities for over 20 years. As the United States becomes more reliant on larger amounts of data driving increased energy usage, Infinera’s indium phosphide-based photonic integrated circuits (InP PICs) are increasingly important, using light to transfer information with greater energy efficiency. The PICs and optical modules are key components in optical network communications and enable the fast, reliable transfer of large amounts of data communications, spanning short-to long-distance broadband networks connecting cities, countries, and continents; between data centers; and between artificial intelligence (AI) and machine learning (ML) clusters inside the data center. This investment will create approximately 500 manufacturing jobs and 1,200 construction jobs.
“We are honored to announce that we have finalized the agreement to receive CHIPS Act funding to increase photonic semiconductor fabrication and packaging in the U.S. and help protect our national security by enabling us to better compete with foreign adversary nations,” said David Heard, CEO of Infinera. “This funding will accelerate delivery of U.S. photonic semiconductor innovations to meet the demands of critical network infrastructure in the era of AI.”
Bethlehem is located in the Lehigh Valley region of PA, home to several semiconductor companies in addition to Infinera (Broadcom, Cisco, Coherent, iDEAL Semiconductor, Intel, and more), which employ 1,500. The semiconductor industry started in Lehigh Valley; long before Silicon Valley, the first transistors were made at Western Electric’s Allentown Works starting in the early 1950s, making the region a global center for semiconductor development for over 50 years.
The Lehigh Valley is a prime example of economic resilience, with its GDP growing from $34 billion to over $55 billion in the past decade. This increase is primarily driven by the region’s $9 billion manufacturing sector, representing 16% of the local economy. Over the last four years, federal investment has surged, fueling this growth. Yesterday, Coherent was granted $79M in proposed funding under the CHIPS and Science Act under a similar agreement to Infinera’s late last year.
