Nokia plans to give NXP Semiconductors’ Chandler manufacturing campus a new role in the buildout of artificial intelligence infrastructure. The telecommunications company has entered into a definitive agreement to acquire NXP’s Chandler Fab and Chandler Probe site. Subject to regulatory approval, Nokia will begin leasing part of the facility in early 2027 and acquire the full campus in the first quarter of 2029.
Nokia plans to convert the site to produce indium phosphide semiconductors for optical components. Those components use light to move large amounts of data through high-speed networks, including the connections linking processors, memory and systems inside AI data centers.
The acquisition comes as that market is growing quickly. Nokia’s Optical Networks sales increased 20% year over year during the second quarter, while sales to AI and cloud customers increased 105%. The company says manufacturing capacity remains one of the industry’s primary constraints.
Nokia is also preparing to ramp production at a new San Jose fab and increase its advanced testing and packaging capacity in Pennsylvania tenfold. Adding Chandler provides another U.S. manufacturing site and an experienced semiconductor team.
NXP has issued a discontinuation notice for legacy products made at Chandler Fab and Chandler Probe that will not move to another manufacturing site. The company says it does not expect any near-term supply impact during the transition.
When In Business Magazine reported in January on NXP’s decision to close its Chandler ECHO facility, the company said its other Chandler fab would continue operating independently. Nokia’s agreement now gives that broader Chandler Fab and Probe operation a new future. The earlier closure involves a separate facility producing gallium nitride radio-power products for 5G infrastructure.
Rather than losing another semiconductor site, Chandler is gaining a different kind of production tied to one of the fastest-growing parts of the technology market.
