Skip to main content
Sister Publication Links
  • Automotive News
  • Automotive News Europe
  • Automotive News China
  • Automobilwoche
Subscribe
  • Subscribe
  • login
  • HOME
  • News
    • News by Brand
    • Auto Shows
    • Canadians Abroad
    • Photo Galleries
    • Automakers
    • Suppliers
    • Retail
    • Dealer Best Practices
    • Government Relations
    • Trade and Tariffs
    • Technology
    • Labour
    • Aston Martin
    • BMW
      • Mini
      • Rolls Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Ferrari
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
    • Honda
      • Acura
    • Hyundai
      • Kia
    • Mazda
    • Mitsubishi
    • Nissan
      • Infiniti
    • Stellantis
      • Alfa Romeo
      • Chrysler
      • Dodge
      • Fiat Chrysler
      • Jeep
      • Fiat
      • Lancia
      • Maserati
      • Ram
    • Subaru
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
    • Volvo
    • VinFast
    • Toronto Auto Show
  • Opinion
    • Blogs
  • Video
  • Podcasts
  • EVENTS & AWARDS
    • 2021 Auto News Canada All Stars
    • 2021 Canadians To Watch
    • Best Dealerships To Work For
    • Canada Congress
    • Retail Forum: Dealer Discussions
    • Leading Women Roundtables
    • Embracing Diversity Roundtable
  • Jobs & Classifieds
  • +MORE
    • IN THE DRIVER'S SEAT
    • NEWSLETTERS
    • SUBSCRIBE
    • CLASSIFIEDS
    • PEOPLE ON THE MOVE
    • COMPANIES ON THE MOVE
    • WEBINARS
    • ADVERTISE WITH US
    • CONTACT US
    • DIGITAL EDITION
    • PUBLISHING PARTNERS
MENU
Breadcrumb
  1. Home
  2. Microchips
March 14, 2022 01:28 PM

How Canada aims to reduce auto's reliance on microchips made overseas

A $240 million federal investment in Canada’s semiconductor sector could help automakers ruse chips made closer to home

David Kennedy
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Microchip BB web.jpg

    A $240 million federal investment in Canada’s semiconductor sector could help automakers and other Canadian manufacturers reduce their reliance on chips made overseas, industry experts say, though it is likely just a first step towards that goal.

    Sarah Prevette, chair of Canada’s Semiconductor Council, an independent group that advocates on behalf of the industry, said shortages over the past two years have exposed how dependent Canada is on other countries for chips, despite the electronic components being fundamental.

    “They’re a part of virtually everything these days. Your phone, your computer, your television, your toaster, your printer, your car — even your car keys — and we are not producing semiconductors at scale.”

    Currently, 92 per cent of the most advanced chips are made in Taiwan by firms such as Taiwan Semiconductor Manufacturing Co. (TSMC), Prevette noted.

    Automotive has been particularly hard hit by the chip shortage. According to AutoForecast Solutions, about 3.1 million vehicles were struck from North American production schedules last year because of a lack of chips. Another 282,600 vehicles have been removed so far this year.

    The two-part federal investment, announced Feb. 28, could help address the problem.

    'TRANSFORMATIVE' PROJECTS

    The department of Innovation, Science and Economic Development pledged $90 million for new equipment at the National Research Council of Canada's Canadian Photonics Fabrication Centre (CPFC). The facility in Ottawa is the only research foundry, or fab, of its type in North America.

    Another $150 million will back “transformative” projects under what Ottawa has billed the Semiconductor Challenge Callout. The government is calling on industry to propose research, commercialization or manufacturing initiatives that will help add to Canada’s footprint in semiconductors.

    Jim Witham, CEO of GaN Systems, said he was pleased to see talk turn to action on the chip shortage and that the Ottawa-based company is already looking at ways it could partner of research and development work.

    GaN, which took its early steps at the research fab in Ottawa, uses what’s known as the fab-lite business model.

    “We do all the design, we have our own IP, we own our own processes and then we outsource the manufacturing to the fabs and the packaging houses,” Witham said.

    While still doing most of its design in Canada, the company has partnered with TSMC to produce its gallium nitride transistors, a type of semiconductor device, for the past seven or eight years. Smaller and more efficient than their traditional silicon counterparts, GaN transistors offer particular promise in electric vehicles, the company says.

    While GaN System has no plans to abandon the fab-lite model and set up its own manufacturing operations, Witham said the company would be a willing customer if an appropriate fab were set up in Canada.

    “If we could actually make some things here, that would be very — not just cool — but it would be very substantial for the company because it makes fast learning cycles, and it would be very substantial for the country because it reduces imports and it fuels local industry and creates jobs.”

    DAILY NEWSLETTER: Sign up and get the top news of the day in your inbox each business weekday afternoon.

    The most advanced fabs, however, typically come with daunting price tags. Both TSMC and U.S. tech giant Intel Corp., for instance, are working on building new manufacturing operations in the United States that will each cost more than US$10 billion.

    For this reason, Witham said Canada would likely be better served working on more specialized foundries. While the most advanced fabs focus on integrated circuits or memory chip production, making analog — as opposed to digital — chips is far less demanding, he said, estimating such facilities would likely cost hundreds of millions as opposed to tens of billions.

    “The nice thing about analog is it’s very diverse. There’s lots and lots of different niches and products to be in. It’s very engineering intensive, and so Canada has a really good engineering base, and so it fits really well.”

    EVs could also factor into the analog chip plans, Witham said, giving the country’s auto sector the chance to work in tandem.   

    Prevette, meantime, is pushing the federal government to conduct a detailed feasibility study of the business case for a Canadian fab.

    “In some instances, even if a price tag is high, it’s an important aspect of a supply chain that’s being disrupted and you might have to make that investment in terms of national security and job security.”

    RECOMMENDED FOR YOU
    Canada to invest $240M to develop semiconductor industry
    Recommended for You
    Microchip Reuters
    Canada to invest $240M to develop semiconductor industry
    cropped-chips.jpg
    Stellantis says partnership with Foxconn will help bring chip supply stability
    Taiwan Semicon microchips BB web.jpg
    Worst of chip crisis might be over, says forecaster LMC Automotive
    Video | Wurth Canada CEO on leveraging advanced retail technology in store
    Sponsored Content: Video | Wurth Canada CEO on leveraging advanced retail technology in store
    Digital Edition
    June 2022 Cover
    View latest issue
    See our archive
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up today for our Weekly Newsletter, Daily Newsletter and Breaking News Alerts. We'll deliver the news you need to know straight to your inbox.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Subscribe Now

    An Automotive News Canada subscription includes 12 monthly issues – delivered in print to your doorstep, and digitally to your inbox – plus unlimited, 24/7 access to our website.

    Subscribe Now
    Connect With Us
    • Facebook
    • Twitter
    • Instagram

    Our Mission

    The Automotive News Canada mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in Canada.

    Contact Us

    1155 Gratiot Ave
    Detroit MI 48207

    1-877-812-1257

    Email Us

    ISSN 2475-5001 (print)
    ISSN 2475-501X (online)

    Resources
    • About us
    • Contact Us
    • Digital Edition Archive
    • Advertise with Us
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Canada
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • News
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Ferrari
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
        • Honda
          • Acura
        • Hyundai
          • Kia
        • Mazda
        • Mitsubishi
        • Nissan
          • Infiniti
        • Stellantis
          • Alfa Romeo
          • Chrysler
          • Dodge
          • Fiat Chrysler
          • Jeep
          • Fiat
          • Lancia
          • Maserati
          • Ram
        • Subaru
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
        • Volvo
        • VinFast
      • Auto Shows
        • Toronto Auto Show
      • Canadians Abroad
      • Photo Galleries
      • Automakers
      • Suppliers
      • Retail
      • Dealer Best Practices
      • Government Relations
      • Trade and Tariffs
      • Technology
      • Labour
    • Opinion
      • Blogs
    • Video
    • Podcasts
    • EVENTS & AWARDS
      • 2021 Auto News Canada All Stars
      • 2021 Canadians To Watch
      • Best Dealerships To Work For
      • Canada Congress
      • Retail Forum: Dealer Discussions
      • Leading Women Roundtables
      • Embracing Diversity Roundtable
    • Jobs & Classifieds
    • +MORE
      • IN THE DRIVER'S SEAT
      • NEWSLETTERS
      • SUBSCRIBE
      • CLASSIFIEDS
      • PEOPLE ON THE MOVE
      • COMPANIES ON THE MOVE
      • WEBINARS
      • ADVERTISE WITH US
      • CONTACT US
      • DIGITAL EDITION
      • PUBLISHING PARTNERS