In the dynamic realm of the North American semiconductor ecosystem, Canada stands as a potentially prominent player, driven by innovation and a commitment to research and development (R&D). With a rich history spanning telecommunications, wireless technology, and photonics applications, Canadian universities have been instrumental in nurturing a skilled cadre of semiconductor engineers, physicists, and materials scientists since the 1970s. This legacy provides a solid foundation for Canada’s semiconductor industry, which continues to thrive in the modern era.
A Multifaceted Approach: Fabless Companies and Design Pioneers
Despite lacking a major foundry, Canada does have some manufacturing capacity and a strong semiconductor ecosystem, which includes 710+ ecosystem Firms, institutions and organizations with 53 Research Centres and Facilities, including:
- Canadian Centre for Electron Microscopy (CCEM)
- Waterloo Institute for Nanotechnology (WIN)
- Nano and Quantum Semiconductors Laboratory
Major clusters of activity can be found in Vancouver, Edmonton, Toronto, Ottawa, Montreal-Bromont, and Quebec City. These geographical hubs serve as the epicenters for Canada’s growing semiconductor ecosystem, where notably over 100 fabless companies have established themselves.
Canadian firms excel in designing (with firm activity illustrated in the below figure), fabricating, and testing semiconductors, circuit boards, and electronic systems across diverse applications. Multinational leaders leverage Canada’s skilled workforce and business advantages, solidifying our status as a semiconductor hub.
Each of these companies contributes its unique mark of innovation, spearheading cutting-edge research, development, and design of semiconductors, circuit boards, and electronic systems. Within this collaborative ecosystem, notable entities like Ciena, TSMC, and GaN Systems have played pivotal roles in elevating Canada’s standing across diverse applications, ranging from consumer electronics to industrial automation.
Research and Development: Powering the Future
At the heart of semiconductor progress lies research and development (R&D), and Canada’s unwavering commitment is evident in its evolving R&D landscape. Demonstrating remarkable dedication, Canadian semiconductor companies have increased R&D expenditures by an impressive 17% over the past two years, from $301 million in 2020 to $352 million in 2022.
Canadian Semiconductor Manufacturing Firm’s R&D Spending 2020-22, $CAD
Furthermore, when compared to all other industries, the semiconductor sector consistently allocates a significantly higher proportion of its resources to R&D, a trend that continues to grow over time. In 2021 (latest), Canadian industry as a whole allocated just 2.1% of revenues towards R&D, while semiconductor firms allocated 12.7%.
R&D Expenditures as a % of Revenues, 2019-2021
Scaling the Hurdles of Diversity: Corporate Profiles and Challenges
Canada’s semiconductor industry boasts a diverse mix of companies, representing varying scales of operations. Among these, a notable number fall within the range of 1 to 99 employees, exemplifying the entrepreneurial spirit that fuels the sector. Moreover, a cluster of firms with employee counts ranging from 100 to 499 highlights the sector’s attempts to scale its presence. However, larger corporations (500+ employees) are limited in number, raising questions about the hurdles they face in establishing a more prominent footprint.
Canadian Semiconductor Establishments by Size, 2022
Despite these challenges, Canada’s semiconductor industry has been making significant strides on the global stage. Over the last five years, the sector has seen a commendable 32% growth in semiconductor exports . In 2022 alone, Canada exported semiconductors valued at $1.4 billion CAD to the US and $50.7 million CAD to Mexico. This upward trajectory underscores Canada’s increasing influence in the global semiconductor market, driven by its emphasis on innovation and advanced manufacturing capabilities.
Canada’s Semiconductor Exports 2017-22 ($CAD)
Canada’s 2023 Semiconductor Landscape
Our comprehensive Semiconductor Ecosystem Map provides a holistic view of Canada’s pivotal role in the North American semiconductor landscape. It showcases both the industry’s achievements and ongoing challenges, emphasizing Canada’s enduring legacy of nurturing skilled talent, fostering innovative SMEs, and prioritizing robust R&D. Moreover, it underscores the vital importance of nurturing an environment that supports sustainable growth, collaboration, and strategic investments. By doing so, Canada’s position and contributions within the ever-evolving North American semiconductor ecosystem can continue to evolve and thrive.
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