Chip Manufacturing To Boost In Canada

Chip Manufacturing To Boost In Canada

Manufacturing Technology Insights | Saturday, September 17, 2022

The Canadian government wants to become a semiconductor powerhouse. This includes short-term, mid-term, and long-term goals for becoming a global chip supplier, manufacturer, and developer.

FREMONT, CA: The Semiconductor Council of Canada has unveiled its strategy for achieving this objective, which would see the country capture a portion of the $7 trillion global semiconductor market. Canada will specifically seek to develop and manufacture chips for markets including automotive, healthcare, consumer electronics, smart agriculture, and others.

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The "Roadmap to 2050—Canada's Semiconductor Action Plan" report highlights the potential for Canada to develop semiconductors to fuel economic growth, including investment in the domestic semiconductor industry.

The move comes when the chip industry is experiencing a persistent supply shortage, causing numerous segments to experience significant delays and sluggish production. The deficit was initially driven by the COVID-19 pandemic, where capacity was shifted to meet the increased demand for computing and consumer electronics due to lockdowns and orders from people staying at home. When demand returned in other industries, other regions could not acquire the required semiconductors.

The Canadian roadmap contains four primary objectives that will position the nation for semiconductor development by 2050:

Strengthening and diversifying supply chain operations: This occurs due to the chip shortage affecting production and supply. The nation will work to secure imports of semiconductors and make a case for expanding domestic production.

Expand domestic manufacturing: A crucial part of this strategy would be to identify which semiconductor chips are in high demand, develop a business model for fabrication, attract multinational semiconductor manufacturers, and enhance engineering talent at home.

Develop Canada as a brand: In addition to focusing on design and R&D, the company specializes in electric vehicles, batteries, and sensors, all of which are expected to experience rapid expansion.

Foster market development: This would be essential for the semiconductor manufacturing industry's initial and ongoing capital requirements.

INCREASING DOMESTIC PRODUCTION

Canada's action echoes the concerns of other regions regarding the concentration of semiconductor manufacturing in a few locations, which could lead to supply chain fluctuations in the future due to geopolitical conflict or future pandemics.

With the United States Innovation and Competition Act (USICA), which includes funding for the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, the U.S. has been very active in developing more manufacturing within its borders. Consequently, numerous regions have called for an increase in domestic semiconductor production. This bill would help to increase U.S. semiconductor manufacturing.

The Senate recently passed a bill to increase U.S. competitiveness by promoting American leadership in science and technology. The CHIPS for America Act would include $52 billion in federal investments for new fabrication facilities, research, and other purposes.

For instance, Intel Corporation wants the United States to produce one-third of all chips worldwide eventually. The United States manufactures approximately 12 percent of the world's total, which is declining. By 2030, the European Union aims to produce 20 percent of the world's semiconductors. Intel, which recently announced the construction of two new fabs in the United States, also plans to construct a fab in Europe and may invest $100 billion in new fabs in the region over the next five years.

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