The $220-million Fabric program helps with prototypes, tools, software, training and funding of up to $10 million for hardware development.
Canada will invest $120 million over five years to build a national chip network as calls intensify for the government to do more to bolster its lagging semiconductor sector.
Industry Minister François-Philippe Champagne announced the outlay from the federal Strategic Innovation Fund on Thursday in Montreal. The investment supports a $220-million project led by the nonprofit research accelerator CMC Microsystems to help Canadian startups commercialize new technologies.
“It’s important to build ecosystems because that’s how we bring out innovators, SMEs,” said Champagne, for whom semiconductors “are the DNA of progress.”
“Support for Fabric secures Canada’s future in semiconductors and advanced manufacturing,” CMC president Gordon Harling said in a statement.
Semiconductors are part of “the great technologies of the 21st century,” Champagne said, and the driving force behind the two major economic trends in Canada: “digitalization and decarbonization of the economy.”
While some are heralding a renaissance in Canada’s chip sector, others say Prime Minister Justin Trudeau’s government has not done enough to keep up with global competition, particularly in the wake of the U.S. Chips Act in 2022. The law set aside US$39 billion in direct grants, plus loans and loan guarantees worth US$75 billion, to incentivize U.S. semiconductor production.
Trudeau’s government has, in contrast, promised billions in subsidies to match incentives in the U.S. Inflation Reduction Act to lure global auto manufacturers to build electric-vehicle batteries in Canada.
Paul Slaby, director of Canada’s Semiconductor Council, recently complained that Canada lacks an industrial strategy for the chip sector. Speaking at the International Economic Forum of the Americas conference in Montreal in June, Slaby said the Trudeau government only lately started building a dedicated team for the industry. He suggested Canada seek to establish itself in international trade by controlling one niche piece of the supply chain, as the Netherlands has done with its photolithography machine producer ASML Holding NV.
Since the announcement of the Chips Act, more than 50 semiconductor projects have been undertaken in the U.S. Competition between the U.S. and China offers an opportunity to align with American interests, Slaby proposed. “We need a semiconductor pact with the U.S.,” he said.
Champagne recalled that U.S. President Joe Biden, during his visit to Canada in spring 2023, reported the existence of a “semiconductor corridor between Bromont and Albany, N.Y.”
The president said, “American resilience requires this great collaboration between the United States and Canada.”
Champagne added that “80 per cent of semiconductors that are manufactured in the United States are finalized here, in Canada, in Quebec,” referring to IBM’s facilities in Bromont.
Nicolas Godbout, the director of the engineering physics department at Polytechnique Montréal, who attended the announcement, called CMC “a very important key player” because “it allows small and medium-sized players to play with the big guys.”
Godbout explained that he expects Fabric to call on researchers and students.
“Polytechnique wants to be part of this great adventure of semiconductors and cutting-edge technologies,” he said.
The Canadian semiconductor sector has more than “500 Canadian and multinational companies conducting microchip research, development and manufacturing,” according to the Department of Innovation, Science and Industry.
“This base includes more than 100 design companies, 30 applied research laboratories and five commercial facilities specializing in compound semiconductors, microelectromechanical systems and advanced packaging,” according to the ministry.