Making the most of the Canada-U.S. semiconductor manufacturing corridor opportunity

United States President Joe Biden’s March visit to Ottawa was important for Canada, and our semiconductor industry in particular. This is part of a larger semiconductor manufacturing trade agreement, or “corridor,” which is great news for Canadian innovation and our national interests. Semiconductors are used to make the microchips that power everything from computers, smartphones, electric vehicles, and health-care and cleantech devices. There are major challenges in the global semiconductor space. First, the COVID-19 pandemic showed how severely global supply chains can be disrupted, as anyone knows who is shopping for a new or used vehicle recently. Second, the relationship between China and the West is driving policymakers to find an alternative to the fragmented global manufacturing system. This is especially true for semiconductors, which are essential for telecommunications, cybersecurity, and defence applications. Onshoring (or nearshoring) production of goods involves substantial retooling of the North American industrial plant. Thankfully, we have substantial capacity in design, build, and test of semiconductors in Canada and the northeastern U.S. CMC Microsystems works with many Canadian and international suppliers of advanced semiconductor processes. The entire ecosystem spans a distance that can be driven in a few hours—and Canada is an important player in it. In Canada, the semiconductor industry is driven by design and development work thanks to a well-trained workforce of highly qualified personnel (HQP) from the universities and colleges. We are known for high value-add, innovative technologies such as exotic compound semiconductors which are essential for high power applications such as EV charging and solar power converters. Gordon Harling is the president and CEO of CMC Microsystems. Photograph courtesy of Gordon Harling The U.S., and New York State in particular, are accelerating semiconductor production with the CHIPS and Science Act, which includes more than US$52-billion for semiconductor manufacturing, research and development, and workforce development, with another US$24-billion of tax credits for microchip production. Micron has committed to building a $100-billion megafab near Syracuse, N.Y., expected to create nearly 50,000 New York jobs. GlobalFoundries is modernizing its Burlington, Vt., plant to produce next-generation compound semiconductor chips that Canadians excel at designing. Hurting from supply chain headaches, General Motors signed an agreement with GlobalFoundries to provide them with a secure supply of chips produced at its various New York sites. When announcing GO SEMI: the Governor’s Office of Semiconductor Expansion, Management, and Integration, Governor Kathy Hochul stated, "We're making New York State not only the semiconductor capital of the country—but of the globe." The Government of Canada and Canadian firms need to act now to remain competitive in this rapidly expanding ecosystem. We need to further develop Canada’s expertise in designing the microchips that will be manufactured in the corridor. This means continuing to train HQP in our universities, developing them in our national ecosystem of companies and research institutions, and retaining them to make sure that the intellectual property they produce benefits Canada. The Oshawa-Oakville-Windsor-Detroit auto corridor is an interesting parallel. Canada seized an opportunity and developed the industrial plant and expertise to be a vital partner in the North American automotive industry. As the automotive industry changes, semiconductors are now the foundation of technologies powering electrification, autonomous driving, and connectivity of the auto industry. Canada has to send a clear message that we will invest in Canadian suppliers and be key players in the semiconductor corridor to foster prosperity and security for all Canadians. Gordon Harling is the president and CEO of CMC Microsystems. The Hill Times

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Making the most of the Canada-U.S. semiconductor manufacturing corridor opportunity

The federal government and Canadian firms need to act now to remain competitive in this rapidly expanding ecosystem.

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