(This article originally was published in LVEDC's Q3 2024 Commercial Real Estate Report).
In anticipation of receiving a $93 million federal grant to expand operations, global semiconductor developer Infinera has plenty of options for where to build. It selected Lehigh Valley, PA, for one of two new facilities. 
Why? Infinera already has a track record of success in Lehigh Valley. It has confidence in the skilled workforce. It values the location, within a day’s drive of one-third of U.S. consumers, in the heart of the Northeast tech corridor running from Philadelphia to Boston.
Building on that success, Infinera announced in early October plans for a new advanced testing and packaging facility in the Lehigh Valley that could employ hundreds.
Infinera, which is being acquired by Nokia, has operated in the Lehigh Valley since 2002. It has grown operations incrementally and now employs about 300 scientists, engineers, and technicians in Upper Macungie Township, near Allentown.
The company’s expansion would grow the Lehigh Valley’s legacy of global leadership in technological innovation. The first mass production of transistors, the forerunner to semiconductors, occurred at Western Electric in Allentown in 1951.
“Lehigh Valley was the original Silicon Valley, and many of the talented engineers and developers remain here,” said Don Cunningham, President & CEO of Lehigh Valley Economic Development Corporation (LVEDC). “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.”
Infinera said it plans to construct a new facility in Bethlehem, and a new production fab in California. Combined, those new facilities are estimated to create 500 manufacturing jobs and 1,200 construction jobs, and to increase Infinera’s domestic manufacturing capacity by an estimated factor of 10.
The funding would come from the federal CHIPS and Science Act. Passed two years ago, the legislation seeks to grow the domestic manufacturing of semiconductors and other technology. Coherent, a leader in optoelectronic devices and technology that has a location in Palmer Township, signed a preliminary agreement in December to receive up to $33 million in CHIPS funding to modernize and expand a facility in Texas. The company previously received $15 million in CHIPS funding to accelerate the commercialization of next-generation wide- and ultrawide-bandgap semiconductors.
While most semiconductor companies are based in the U.S., most manufacturing occurs in Asia. The goal is to spur domestic production and limit economic, national security, and supply chain risks.
“The proposed CHIPS funding will enable us to better secure our supply chain and compete more effectively with foreign adversary nations,” Infinera CEO David Heard said. “Our unique photonic semiconductors address the increased demand for bandwidth from consumers while opening new markets inside the data center driven by the explosive growth in AI workloads.”
Infinera and the U.S. Department of Commerce have signed a nonbinding preliminary memorandum of terms for the CHIPS funding.
The new facility in Bethlehem would be similar to Infinera’s current 60,000-square-foot advanced testing and packaging center in Upper Macungie. There, Infinera designs, manufactures, packages, assembles, and tests optoelectronic packages and modules built around its unique optical, compound semiconductor photonic integrated circuits.
Chips produced in California are sent to the Lehigh Valley to be tested for quality and assembled into modules to be inserted into optical transport equipment used for networking, cloud connectivity, and data center interconnect services.
“From artificial intelligence to electric vehicles to telecommunications infrastructure, 21st century technologies all rely on optical semiconductors like the ones manufactured by Infinera,” said U.S. Secretary of Commerce Gina Raimondo.
In addition to Infinera, Lehigh Valley is home to technology giants Broadcom, Cisco, Coherent, and Intel, along with new companies such as iDEAL Semiconductor and AAYUNA.
Collectively, the industry employs about 1,500 people who are developing, producing, and assembling semiconductors that are driving innovations such as AI and are relied on by brands such as Google, Microsoft, Meta, AWS, AT&T, Verizon, Netflix, and Nokia.
Innovation is driven by the region’s colleges and universities and organizations such as Ben Franklin Technology Partners of Northeastern Pennsylvania, which operates the TechVentures business incubator in Bethlehem for emerging tech businesses.
“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,” Cunningham said. “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.”
Last year, a coalition led by LVEDC applied to be designated as a Tech Hub by the U.S. Economic Development Administration.
While unsuccessful, the process brought together and unleashed a powerful coalition of technology companies, colleges and universities, workforce development, labor organizations, and others who are continuing to work together to expand the Lehigh Valley’s semiconductor and technology sector.
The coalition developed a plan for a Lehigh Valley Semiconductor Center, a place where early-stage semiconductor and technology based companies can grow in a partnership with higher education, bringing students and faculty together with entrepreneurs.
In November, Gov. Josh Shapiro’s administration awarded a $2.5 million grant toward development of the Center, which is planned in Bethlehem.
(Photos by Donna Fisher Photography)