On August 3, in Pleasant Prarie, Wisconsin, Nokia executives announced plans to be the first telecom company to manufacture its fiber-optic broadband products and optical modules in the U.S. for us in the Broadband Equity, Access, and Deployment (BEAD) program. Nokia is a significant supplier to the US market, and now, it announced plans to work with Sanmina’s Pleasant Prairie, Wisconsin, location to bring as many as 200 jobs to the state. The event is important not only to Nokia and Sanmina but it was attended by important members of the U.S. Federal Government, including Vice President Kamala Harris.
We think Nokia’s move will pressure other Nokia competitors to shift manufacturing to the U.S., as well. Given that Nokia has large manufacturing volumes and is taking the early initiative to shift to U.S. manufacturing, it’ll likely manage the shift with few, if any, hiccups. It is also apparent that Nokia wants to work with U.S. operators and will ensure they get access to BEAD funding.
We think the Nokia move to U.S. manufacturing proves that U.S. funding priorities can return jobs to U.S. soil. We expect that there will be a price premium for buying U.S.-manufactured telecom goods, though, and therefore, U.S. taxpayers will shoulder the burden. Is this U.S. manufacturing premium worth it? During the pandemic, many of us learned that supply chain dependencies matter a lot. Time will tell if paying a premium to move some – or all – manufacturing back to the U.S. is worth it, but a move towards “some” will at least achieve some element of supply chain diversity.
We have been tracking the markets impacted by Nokia’s U.S. manufacturing move since we founded 650 Group. For instance, we publish various SP-focused reports, and more specifically, market share and forecast reports about fiber-optic broadband access equipment.