Canada's Semiconductor Future: The Critical Need for a Unified National Strategy

Avinash Persaud
July 11, 2024
CkD
HardTech
Semiconductor
AI
ventureLAB News

Canada deserves a comprehensive national strategy to strengthen its semiconductor and Artificial Intelligence (AI) sector, and the window of opportunity is now. 

Over the last year we have observed an upward trend in investment from the Canadian government in the semiconductor and aligned sectors like AI.These investments are crucial for strengthening and building resiliency in Canada’s design and manufacturing semiconductor ecosystem. Last week, the Federal government announced a $120 million investment in CMC Microsystems FABrIC initiative that will further support the design, manufacturing and commercialization and commercialization of semiconductors and the development of intelligent sensor technology. Earlier this year, we also saw a $2.4 billion investment in AI and $59.9 million IBM Canada. 

These investments are great initial steps to unite the fragmented efforts that will fully utilise Canada’s already existing advantages in semiconductor research and development. While Canada excels in research, there is a significant gap in commercialization, which is where ventureLAB is focusing its efforts to support companies in bringing their products to market. Our mission is to power hardtech founders to build and scale globally competitive ventures that advance Canada's knowledge-based economy.

Canada is poised to lead the semiconductor and AI sectors with a timely talent strategy, ensuring that the skilled workforce required for these advanced sectors is developed and retained. As noted by the Government of Canada, immigration accounts for almost 100% of Canada’s labour force growth, and, by 2032, it’s projected to account for 100% of Canada’s population growth. However, current policies create obstacles that discourage talent, founders and investors to come to Canada. According to TechNation’s survey, nearly two-thirds of Canadians say that Canada will lose talented people to other countries if it doesn't invest in AI, and 42% believe Canada’s standard of living depends on how much Canadians invest in the technology.

In Canada, collaboration among industry, government, academia, investors, and ecosystem partners is crucial. Investing in innovative sectors like semiconductors will help close the productivity gap, increase efficiency, and output across industries. Additionally, these investments will give us a competitive edge and attract and retain top talent by creating high-skilled jobs, doubling down on our strong talent pipeline. 

Too often, the semiconductor sector is viewed as an isolated industry while the reality is that semiconductors underpin every industry you can name. They are the engine for many critical sectors, namely AI, advanced manufacturing, smart city, mobility, renewable energy, and health care—all of which are leading industries in Canada. For example, over 70% of semiconductor companies plan to invest in AI-driven automation by 2025 per the World Metrics Report 2024. Semiconductors are in planes, trains, automobiles, from toys and entertainment devices to life saving medical equipment. They are everywhere, and Canada requires this ongoing support and a comprehensive strategy to compete globally in semiconductor design and fabrication. To position Canada as a resilient and competitive key player in the global supply chain, it's crucial to enhance international connections and strengthen global supply chain integration within the semiconductor industry. 

While Canada is recognised for its academic prowess and application developments in AI, it is also very important to acknowledge Canada’s robust and advanced AI semiconductor development being done here. We are encouraged to see the investment in emerging AI, semiconductor, system solutions and microelectronic companies to help them bring products to market and compete with established players. With expertise in commercialization and robust programs, ventureLAB provides significant support to companies like Blumind, Applied Brain Research, Lemurian Labs and others. Programmes like the Hardware Catalyst Initiative and the HardTech Investor Network are crucial in connecting innovative companies with the right investment opportunities, fostering growth, and enabling them to scale and succeed in the competitive global market.

ventureLAB recognizes the important role international companies play in the hardware and software sectors and addresses the opportunities through its Canada Catalyst Startup Visa Program. This program is designed to help companies establish a footprint, broaden their reach and attract top talent in Canada. Such initiatives are key to a capital intensive industry that can ultimately lead to tens of thousands of jobs. A 2021 study by the Semiconductor Industry Association of America found that for every semiconductor professional, 5.7 jobs are created in the broader economy.

While there is still much work to be done, these investments are a promising step in the right direction, putting Canada on the path to become a global leader in the AI and semiconductor industry. To truly compete on the global stage, Canada needs a unified, strategic vision that leverages its existing strengths and fosters collaboration across all sectors involved in semiconductor development.

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