The severe supply-chain disruptions that stalled auto production around the world in recent years, illustrates the industry’s heavy reliance on computer chips. Recent events also raised flags over the heavy concentration of semiconductor manufacturing in specific parts of the world. In fact, South Korea and Taiwan account for virtually all advanced semiconductor production14 led by major corporate players Samsung and TSMC.15 The United States and China are developing noteworthy plans to expand semiconductor production as a matter of national security. Canada’s microscopic footprint in this growing sector hurts our industrial development ambitions. The federal government would be wise to incubate a domestic semiconductor industry to supply strategic growth sectors. Canada should follow the strategic advice of the Canada Semiconductor Council16 and foster a domestic semiconductor ecosystem around Canada’s domestic EV strategy.
14 Boston Consulting Group, April 1, 2021, Strengthening the Global Semiconductor Supply Chain in an Uncertain Era: https://www.bcg.com/publications/2021/strengthening-the-global-semiconductor-supply-chain
15 See Bloomberg News, May 6, 2021, The Chip Shortage Keeps Getting Worse. Why Can’t We Just Make More? https://www.bloomberg.com/graphics/2021-chip-production-why-hard-to-make-semiconductors/
16 See Canada Semiconductor Council report recommendations, https://canadassemiconductorcouncil.com/wp-content/uploads/2021/11/Canadas-Semiconductor-Action-Plan.pdf