OTTAWA — A group of industry associations is calling for the federal government to craft a national strategy to grow chip firms and manufacturing, as Canada looks to get in on semiconductor reshoring. Here’s what you need to know.

Conditions on the ground: Idled car factories and back-ordered personal electronic devices due to chip shortages tuned in consumers and policymakers to the importance of the semiconductor supply chain. Governments are offering billions for companies to build domestic production facilities, or “fabs.” Ottawa has so far allocated $250 million from the Strategic Innovation Fund (SIF), and given the National Research Council $90 million to upgrade the Canadian Photonics Fabrication Centre. 

But “we are behind,” according to Paul Slaby, managing director of Canada’s Semiconductor Council, whose members include incubator VentureLab, as well as industry firms like AMD and Alphawave. He cited the significant sums that the U.S., EU and South Korea are offering.

The asks: In June, industry and post-secondary associations including the council formed a supergroup called SILICAN. In a report released Monday, the collective—called for Ottawa to set up an office to coordinate semiconductor policy and programs across the government. It also wants federal departments to buy more homegrown chips for their data centres.

Moreover, SILICAN is pushing the government to provide financing to domestic firms through the SIF and the export-underwriting Canada Account, and by instructing the Business Development Bank of Canada and Export Development Canada to offer more credit. 

The group isn’t putting a dollar figure on its recommendations. “This is not a demand for more money,” said Ben Bergen, president of the Council of Canadian Innovators, which represents more than 150 scale-ups. He said SILICAN is instead seeking greater transparency about what semiconductor firms and projects federal programs are backing, and more coordination between those programs. “What we’re really looking for is a chef in the kitchen that’s doing a bit more of that complex industrial policy.” 

(Some of SILICAN’s constituent associations are lobbying Ottawa to increase semiconductor funding; Slaby’s council is preparing a separate proposal for new programs).

The semiconductor industry employs about 20,000 workers, according to federal estimates. And SILICAN’s members expect the sector to keep staffing up, particularly if Canada gets a share of the reshoring spoils. The group is recommending that Ottawa fund scholarships and internships in the sector, as well as semiconductor research. In addition to recruiting students, the industry needs support to attract mid-career workers from other sectors and reskill the ones it has, said Madison Rilling, executive director of Quebec City-based Optonique, the provincially funded photonics cluster.

What you sow: Bergen said SILICAN has met with officials in the Prime Minister’s Office and Innovation, Science and Economic Development Canada, as well as the Alberta and Ontario provincial governments.  

Longer term, its members want to see the chip supply chain integrated within Canada, and with production lines setting up across the border. The group is seeking federal support for projects that will create fabrication and assembly capacity in startup hubs. 

“We’re not going to have $40 billion to drop on a new fab,” Bergen acknowledged. But Canada could focus on fields like compound semiconductors and photonics. There’s “amazing expertise here that will be essential to the future of the semiconductor supply chain,” said Rilling.