The Canada Semiconductor Council unveiled a report with the title "Roadmap to 2050: Canada's Semiconductor Action Plan" in November, trying to come up with a strategy to address the "twin shocks" of lacking reliable supply of semiconductors and rising demand in the future.

The need for a more diversified supply chain is among the reasons that the report calls for action. As climate change in 2021 has had a profound impact on the global semiconductor industry, experts began to notice that semiconductors are almost exclusively manufactured in regions at high risk for natural disasters, including Taiwan, which is prone to damaging typhoons and earthquakes.

Geopolitics and superpower competitions have had top manufacturers including TSMC and Samsung accelerate diversifying their manufacturing base due to the demand of the US government. Japan has seized the opportunity by offering subsidies to invite TSMC to manufacture chips with local companies in Japan, too.

The report quoted high-speed connectivity solution company Alphawave CEO and founder Tony Pialis as saying that it is time for a change, and if no action is taken, Canada will always be in big brother's shadow.

Although Canada's semiconductor industry lags behind Taiwan, Israel, and the US, the report stressed its enormous potential, thanks to the high quality of Canadian STEM talent, strong foundation in R&D, and access to raw materials critical to electronics production.

The Action Plan draws the roadmap in three phases and made policy recommendations for four dimensions, including "strengthen and diversify supply chain", "develop onshore manufacturing", "establish a unique specialization and brand for Canada," and "foster innovation and support market development." The short-term (2021-2025) goal would be establishing a Canadian consortium of cross-industry semiconductor buyers, attracting multinational semiconductor companies to Canada, and developing a sustainable business model for domestic manufacturing.

Meanwhile, increasing incentives for support for Canadian semiconductor and sensor R&D, design and manufacturing, and investing in EV R&D, and leveraging Canada's strengths to develop domestic supply chain and market demands are also recommended for short-term efforts.

Calls for increasing investment in domestic companies that are designing and developing AI and quantum-enabled chips, incubating and supporting made-in-Canada startups in the semiconductor industry, while launching targeted chip innovations with higher education institutions, and creating a demand for made-in-Canada chips by the federal government are among the recommendations for strategies to foster innovation and support market development.

Canada currently has the minimal infrastructure to support the domestic fabrication of chips, but its automobile industry, which contributed the second-largest Canadian export by value at $42.9 billion in 2020, has a huge demand for chips.

The trend of electrical vehicles is also pushing the innovation in the automotive sector to shift from mechanics to electronics, with electronics systems projected to account for 50% of the average car in 2030, compared to 22% of the total cost in 2000, according to Deloitte research.

Autonomous driving would also require all kinds of chips and sensors. Judging from the fact that the automobile industry worldwide suffered great loss in the midst of a chip crunch, the economy would be at risk without securing stable semiconductor supplies.

In a recent interview with DIGITIMES about expanding the list of products entitled for lower tariffs in the new ITA-3 agreement, US thinktank Information Technology Innovation Foundation (ITIF) vice president Stephen Ezell estimated that demand is anticipated to increase 50% this decade, which means we need at least 60 new fabs across the world to meet the demand.

A report by SEMI in June 2021 estimated that there are 29 fabs under construction in 2021-2022, including 8 in China and Taiwan, respectively, 6 in America, 3 in EMEA, and 2 in Japan and South Korea, respectively. That did not include Samsung's recent plan to invest $17 billion in building fab outside of Austin Texas, a GlobalFoundries $4 billion new fab in Singapore, and Intel's $80 billion euros investment to boost chip capacity in Europe.

By DIGITIMES