Canada commits $240 million to bolster domestic semiconductor ecosystem

Government of Canada buildings
The financing will fuel a new semiconductor fund and updates to the CPFC fab.

The Government of Canada has announced plans to invest a total of $240 million CAD to strengthen the country’s semiconductor and photonics design and production capabilities.

This funding includes $150 million towards the newly created Semiconductor Challenge Callout (SCC) fund, provided through the Strategic Innovation Fund, for targeted investments in semiconductor development and manufacturing. It also includes a $90 million investment towards the Ottawa-based Canadian Photonics Fabrication Centre (CPFC).

The country’s semiconductor sector currently includes over 100 homegrown and multinational companies, including GaN Systems and Redlen.
 

Through these commitments, the federal government aims to help address the global chip shortage, build on Canada’s existing semiconductor strengths, and help establish a “more resilient and integrated” Canadian supply chain.

“Our government wants Canada to be a strategic global leader in the semiconductor industry,” said François-Philippe Champagne, Canada’s minister of innovation, science, and industry. “Whether it’s high-value or large-scale manufacturing, we want to see Canada be home to the world’s leading semiconductor manufacturers.”

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Champagne described photonics as “an area of real Canadian strength and leadership.” Photonics is used in the country’s telecommunications networks, and is a technology Champagne said that “we all benefit from on a daily basis.”

According to the Government of Canada, the country’s semiconductor sector currently includes over 100 homegrown and multinational companies, including GaN Systems and Redlen, that conduct research and development on microchips.

The country also houses a manufacturing base with over 30 applied research labs and five commercial facilities with specialized capabilities in compound semiconductors, microelectromechanical systems, and advanced packaging.

The federal government said the SCC represents “Canada’s initial commitment to investing in innovation projects that will reinforce and scale up” the country’s semiconductor ecosystem. The SCC is currently accepting applications.

Meanwhile, Canada’s investment in the CPFC will help upgrade the facility’s equipment and bolster its manufacturing capabilities.

The National Research Council of Canada-backed CPFC provides photonics device fabrication services to the research and private sectors, including small and medium-sized businesses operating in the telecom, environmental sensing, automotive, defence, and aerospace industries.

According to the Government of Canada, the CPFC is the only compound semiconductor foundry that is publicly operated and open to all.

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Canada has a deep history in the chip sector and was once considered a leader in the space, with GaN Systems and Redlen among the current leading companies nationally. The world has been facing a shortage of chips over the past year, and Samsung, one of the world’s biggest manufacturers of semiconductors, has predicted a 54 percent jump in profit as the shortage continues.

Last year, a group of professionals created the Semiconductor Council in the hopes of making Canada a global hub for semiconductor research, design, and manufacturing. Late last year, the council released recommendations on how to build Canada’s semiconductor space calling for onshore manufacturing capabilities for semiconductors – meaning the creation of a fabrication plant.

Noted Canadian investor Matt Roberts, who has a family history in the semiconductor industry, called many of the proposals good, but warned: “on the point of a building semiconductor fab … I want to make clear I don’t think the timing could be worse for this.” Roberts cited the expensive nature of the endeavour, pointing to other countries that are already creating fab plants. “I think we should be watching in disbelief as more countries saddle themselves with the expensive initial cost and maintenance of fabs,” he said.

Asked today about the newly announced updates to the CPFC fab, however, Roberts said: “I’m all for it.”

“This just makes sure researchers and startups have access to build and test samples while working with top fab equipment, preparing them to work with larger fabrication providers,” he continued. “It also doesn’t saddle Canada with huge capital outlay that would struggle to pay for itself at a time when future announced semiconductor fabrication supply worldwide is at an all-time high.”

With files from Meagan Simpson and Douglas Soltys.

Feature image by Pegleess Barrios via Burst.

Josh Scott

Josh Scott

Josh Scott is a BetaKit reporter focused on telling and breaking Canadian tech and innovation stories. His coverage is more complete than his moustache.

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