Growing the Canadian semiconductor ecosystem must be a national priority

The importance of semiconductors became clear during the COVID-19 pandemic, when snarled global supply chains exposed weaknesses in the world’s overreliance on one part of the world for manufacturing of such critical components. Increasing tension between the United States and China over Taiwan add another layer of complexity to the geopolitical picture. At the same time, rapid adoption of new technologies requiring massive computing power such as Artificial Intelligence (AI) are fueling increased demand for semiconductors (or chips).

The status quo is not an option

There is consensus in the West that the status quo is not sustainable, and a major shakeup is needed. We need to on-shore or friend-shore semiconductor manufacturing capacity to secure our supply of chips, and to secure our national interests in a world that is increasingly digital. We are now at a rare inflection point in the semiconductor sector, and this presents Canada with an opportunity we cannot afford to squander. And as with most opportunities, we have to act immediately and decisively.

The United States & Europe

The United States acted quickly to pass the CHIPS and Science Act which includes $52 Billion USD in subsidies and other incentives for semiconductor manufacturing. Intel, Samsung, Micron, TSMC, Texas Instruments, Qualcomm-GlobalFoundries, have unveiled plans for a number of new US chip fabrication plants.​​​ President Biden has expressed interest in developing a Canada-US semiconductor manufacturing trade agreement, or ‘corridor’ to strengthen the entire North American ecosystem . The European Union has announced similar measures in the €43 billion European Chips Act. These are colossal sums that Canada cannot compete with. So what’s a country like Canada to do?

Canadian Semiconductor Ecosystem

Canadian talent is designing the technology that will power tomorrow’s applications. Our universities and colleges produce exceptional talent that is the envy of many countries around the world. We excel in upstream activity – mainly design of some of the most promising technologies such as compound semiconductors, photonics, and quantum. These are technologies with enormous market potential and high value-add. Canadian talent is designing the technology that will power tomorrow’s applications. Unfortunately, too many semiconductor professionals and firms leave Canada – often taking their valuable intellectual property with them. Let’s think of the fallout simply in terms of return on investment to the Canadian taxpayer. We have trained them all the way to post-secondary graduation, only to lose them in their most productive years. We must realize this is unacceptable.

For our part, CMC and ventureLAB recently signed an MOU to signal our shared commitment and dedication to grow the Canadian ecosystem. ventureLAB will provide resources from its Hardware Catalyst Initiative – a lab and incubator for founders building hardware and semiconductor-based products to entrepreneurs and researchers from the CMC network. CMC will provide ventureLAB with CMC’s Virtual Incubator Environment (VIE) a suite of tools for startups to design, test, and build their semiconductor innovations at accessible rates. We are also joining our voices to promote FABrIC, a Canada-wide initiative to grow Canada’s semiconductor ecosystem by leveraging existing chip design and manufacturing facilities, providing companies with financial support, and shared access to a knowledge base of intellectual property backed by a trusted global supply chain and deep technical expertise.

We are hopeful that the Government of Canada will have good news for our sector soon​. In a time of fiscal restraint, governments need to recognize the economic impact of the semiconductor industry and view it as a driver of economic growth. A 2021 study by the Semiconductor Industry Association of America found that for every semiconductor professional, 5.7 jobs are created in the broader economy. Canada has the talent and skills to lead in semiconductors. It is time for the Government to send a clear message and invest in the ecosystem and help us build a more innovative and resilient economy.

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Avinash Persaud is vice-president of ventureLAB’s Hardware Catalyst Initiative

https://www.venturelab.ca/programs/hardware-catalyst-initiative

Gordon Harling is president and CEO of CMC Microsystems.

https://www.cmc.ca/