Canada’s Semiconductor Council released its recommendations to reinforce Canada’s semiconductor supply chain on Nov. 23.
The report summarized the council’s suggestions for Canada’s short, medium and long-term semiconductor strategies in four key areas:
- Strengthen and diversify the supply chain
- Develop onshore manufacturing
- Establish a unique specialization and a brand for Canada
- Foster innovation and support market development
The ongoing semiconductor shortage has the world racing to increase production. The U.S. government recently approved a US$52 billion fund to strengthen its semiconductor supply chain and has assembled a special task force to investigate the supply chain discontinuities.
Canada’s semiconductor supply chain development, on the other hand, has been relatively unexciting. But with the global market growing to more than US$7 trillion, experts say Canada’s underdeveloped semiconductor market represents not only a good opportunity for investment and returns, but one that’s tied to its national security.
“Countries like China, South Korea, and the US view advanced semiconductors as fundamental to national security,” said Ron Glibbery, founder of Peraso. “The potential crisis for Canada is a situation where semiconductors become a national security issue. From a manufacturing perspective, we have minimal infrastructure to support that.”
Semiconductor production is an industry with a high barrier to entry. Aside from the immense capital and time required to establish operations, it also requires the right talents. Still, the council urges Canada to develop its own manufacturing capability within the country, starting with identifying the most in-demand products. Moreover, Canada must improve its engineering talent to build upon the traditional fabrication process and pioneer a more flexible approach.
“We have all of the expertise and resources needed to design the brains that underpin virtually all emerging technologies,” said Kevin O’Neil, corporate vice president and managing director of AMD Canada. “With industries such as electric vehicles and battery production absolutely taking off, establishing ourselves as a semiconductor design powerhouse is one of the smartest moves Canada could make.”
Due to the large amount of initial capital required, the report noted that venture capital and angel investors alone cannot provide sufficient funding. To kickstart the industry, Canada should rely on a mix of public and private funding, as well as more incentives, to grow its semiconductor industry.
The report noted that in developing its own supply chain, Canada has the chance to specialize in research, electric vehicle, and smart transportation technology. The existing talent pool has already positioned Canada to succeed on this front.
Beyond this standout use case, demands for semiconductor products are soaring across all industries such as mining, agriculture, telecommunication and healthcare.
Formed in May 2021, Canada’s Semiconductor Council is an independent coalition comprised of leaders from across the semiconductor industry. Its council members consist of Sara Prevette, founder of Future Design School; Melissa Chee, president of VentureLab; Kevin O’Neil, general manager of AMD Canada; and Salim Teja, partner of Radical Ventures. The council connects with more than 100 industry stakeholders and academic institutions.