Chip Shot

Semiconductors are critical components of countless business and consumer products, including cars, computers, appliances, gaming systems, and manufacturing equipment. Economies that depend on semiconductors are vulnerable to bottlenecks and geopolitical disruption in highly fragmented global value chains. Canada is no exception.

With the semiconductor industry in the midst of technological, geopolitical, and economic change, firms and governments in the United States, China, Europe, India, and elsewhere are making multi-billion-dollar investments to generate and secure advantages. Canada has strengths that could be enhanced with strategic investment. Yet, the inertia that plagues much of the Canadian innovation ecosystem also seems to affect the semiconductor sector. Canada has been slow to act.

Canada should focus its semiconductor strategy on better integration with global value chains rather than self-sufficiency. For Canada to be successful in key sectors of the industry, firms and governments should increase funding for research and development, commercialization, and intellectual property protection; develop stronger programs for semiconductor start-ups and scale-ups; enhance semiconductor innovation infrastructure; improve education and career pathways for highly skilled personnel; and strengthen partnerships with major actors in global value chains, especially the United States.