A group of semiconductor and technology industry associations has released a report asking the federal government to create a Canadian version of the United States’ CHIPS and Science Act to make the country more competitive on the global stage.
“For Canada, the semiconductor sector is both a strategic vulnerability and a once-in-a-generation opportunity for growth.”
The report, released today, says Canada is “well placed” to lead the next generation of semiconductor innovations. It provides five policy recommendations as a foundation for a future national semiconductor industrial strategy.
As the only G7 country without a national semiconductor strategy, the consortium warns there is a gap that could threaten Canada’s competitiveness, capacity to scale innovation, and ability to exercise technological sovereignty over the digital economy.
“For Canada, the semiconductor sector is both a strategic vulnerability and a once-in-a-generation opportunity for growth,” the report, released by Canada’s Semiconductor Council (CSC), CMC Microsystems, the Information and Communications Technology Council (ICTC), and ventureLAB, reads.
Canada’s advantage, according to the report, is that it specializes in “key enablers” of artificial intelligence, defence innovation, and advanced computing. These specializations include research and development (R&D), design, photonics, and advanced packaging, while other jurisdictions focus on mass fabrication—something Canada currently doesn’t have the capacity to do.
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To support these advantages, the report calls on Canada to significantly increase public R&D investment, invest in targeted semiconductor industry training programs, deepen partnerships with other strong semiconductor-producing nations, implement targeted regulatory and procurement support, and place increasing domestic semiconductor fabrication and packaging capacity as an initiative under the Major Projects Office.
The consortium hopes Canada can follow countries like the United States, which has invested over $50 billion USD ($70 billion CAD) in its semiconductor industry through the CHIPS Act, or the European Union, which has its own 43 billion euro ($70 billion CAD) EU Chips Act.
Five countries–South Korea, Japan, Taiwan, China, and the United States–account for approximately 90.7 percent of the global semiconductor market. The US represents more than 50 percent of the global market share. The European Union, meanwhile, makes up 9.2 percent.
The countries collectively split the $631 billion USD ($883 billion CAD) global semiconductor market in 2024, according to the report. That market is expected to exceed $800 billion USD ($1.1 trillion CAD) by 2026 as demand for AI applications and cloud infrastructure increases.
“Other countries, recognizing the centrality of semiconductors in the global economy, are already mobilizing to increase their share of the global market,” the report warns. “Canada needs to move quickly or risk losing talent, IP, investment, and its position as a globally competitive country.”
Canadian semiconductor leaders BetaKit spoke with at VentureLab’s HardTech Summit in October argued that Canada should do more to support its own chip companies, particularly at later stages, as multiple promising Canadian chip startups either moved south or got snapped up by larger American players over the past year.
“As Canadians, we have this humble tendency, which I think, in general, is a great thing,” Chris Smith, AMD corporate vice-president and head of the firm’s Toronto Markham Design Centre, said at the summit. “However, we’re talking about a global war for talent and for innovation, and I think in that capacity, we have to be bold.”
Feature image courtesy Vishnu Mohanan on Unsplash.