Canada to spend $240 million to grow chip manufacturing

03 March 2022

The Government of Canada will invest some $240 million to help the country expand its presence in photonics and the manufacturing of semiconductors.

Canada has already made moves to increase its semiconductor manufacturing when last year it said it would invest funds to become a developer, manufacturer and global supplier of semiconductors with a four-step plan to expand chip development by 2050.

The $240 million will be in collaboration with Canadian researchers and businesses to strengthen its electronics industry with a fund of $150 million through the Strategic Innovation Fund to target investments to build Canada’s strengths in the supply of semiconductors.

Additionally, $90 million in funding will be put into the National Research Council of Canada’s Canadian Photonics Fabrication Centre (CPFC).

“Our government wants Canada to be a strategic global leader in the semiconductor industry,” said Francois-Phillippe Champagne, Canada’s Minster of Innovation, Science and Industry. “That’s why we’re investing $240 million today to strengthen our semiconductor ecosystem, which will allow us to build a more innovative and resilient economy. By investing in Canada’s semiconductor industry, we are making a firm commitment to businesses looking to invest in Canada.”

Champagne said the long-term goal is to see Canada become home to the world’s leading semiconductor manufacturers.

Photonics growth

Canada’s investment in the CPFC will upgrade its equipment, improve the center’s capacity and capability to address leading-edge technology. The Canadian photonics sector has been a key technology for the country over the last two decades.

The CPFC is the only compound semiconductor foundry in North America that is publicly operated and open to all for use. It has been used to impact photonics devices fabrication for sectors such as telecommunications, environmental sensing, automotive, defense and aerospace.

Canada is joining a chorus of countries and regions that are expanding into semiconductor manufacturing in response to the chip shortage that has impacted the supply chain since late 2020.

This incudes the proposed European Chips Act that was announced last month to provide more than $50 billion in funding for new investments in Europe for semiconductor manufacturing and the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, which would see investments north of $50 billion to increase domestic chip making in the U.S.

Additionally, these regions are concerned that future pandemics, such as COVID-19, which initially caused the chip shortage, or future geopolitical issues will stretch the supply chain.

By diversifying where chips are made, the hope is that these strains on the supply chain will be lessened and business can continue to function without future shortages.

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