In an era defined by digital transformation, artificial intelligence, and advanced manufacturing, semiconductors are the lifeblood of modern innovation. Yet Canada, despite its robust tech ecosystem and world-class research institutions, remains conspicuously absent from the global race to dominate semiconductor fabrication and high-end chip production. This strategic gap presents both a challenge and a golden opportunity. Canada must urgently invest in semiconductor fabrication, and Ontario,home to the country’s most dynamic tech corridor,should lead this national initiative.

Why Semiconductors Matter More Than Ever
Semiconductors power everything from smartphones and electric vehicles to quantum computers and defense systems. The global semiconductor market is projected to surpass US$1 trillion by 2030, driven by explosive growth in AI, autonomous vehicles, and clean energy technologies. These chips are not just components,they are strategic assets that underpin national security, economic resilience, and technological sovereignty.
Countries like the United States, South Korea, Taiwan, and Germany have recognized this and are pouring billions into domestic chip production. Canada, by contrast, has yet to make semiconductor fabrication a top-tier priority. While we have strong capabilities in chip design and research, our lack of fabrication infrastructure leaves us vulnerable to global supply chain disruptions and geopolitical tensions.

Canada’s Semiconductor Landscape: Strong Roots, Shallow Reach
Canada’s semiconductor industry contributes over $7 billion to the economy, with a projected growth to nearly $9 billion by 2027, outpacing the U.S. growth rate. However, this growth is largely concentrated in design, testing, and packaging,not fabrication. Fabrication, or “fabs,” are the facilities where chips are physically manufactured. These are capital-intensive but essential for full-stack semiconductor sovereignty.
Canada’s absence in this space means we rely heavily on foreign fabs, particularly in Asia. This dependency became painfully clear during the COVID-19 pandemic, when chip shortages crippled industries from automotive to consumer electronics. Without domestic fabrication, Canada risks being a perpetual consumer rather than a creator in the chip economy.

Ontario: The Natural Leader for Canada’s Chip Ambitions
Ontario is uniquely positioned to lead Canada’s semiconductor fabrication initiative. The province already hosts 51% of Canada’s electronics-related employment, contributes $800 million to GDP from semiconductors, and exports over $1.1 billion in semiconductor and electronics components. It’s home to global players like AMD, Intel, and Qualcomm, and boasts cutting-edge facilities such as ventureLab’s Hardware Catalyst Initiative in Markham and TSMC’s Design Center in Ottawa.
Recent investments, like Ranovus Inc.’s $100 million expansion in Ottawa, signal Ontario’s growing momentum in high-end chip design and AI-focused semiconductors. But design alone is not enough. Ontario must evolve from a design hub to a full-stack semiconductor powerhouse, including fabrication.

Building Fabs in Ontario: Why It’s Feasible
Fabrication facilities are expensive,often costing $10–20 billion to build,but Ontario has the ingredients to make it work:
- Skilled Workforce: Ontario’s universities and colleges produce thousands of engineers and technicians annually.
- Clean Energy: Ontario’s affordable, low-emission electricity is ideal for energy-intensive chip manufacturing.
- Strategic Location: Proximity to the U.S. and access to global markets via trade agreements covering 1.5 billion consumers.
- Government Incentives: Ontario offers competitive tax rates and funding programs like the Invest Ontario Fund.
These advantages make Ontario not just a viable location for fabs,but a strategic one.

High-End Chips: Canada’s Strategic Niche
Rather than compete directly with Taiwan or South Korea in mass-market chips, Canada should focus on high-end, specialized semiconductors for AI, quantum computing, automotive safety, and clean energy. These chips require advanced fabrication techniques and offer higher margins, making them ideal for a smaller but highly skilled ecosystem.
Ontario’s existing strengths in AI, automotive innovation, and quantum research make it the perfect launchpad. For example, automotive semiconductors—used in electric vehicles and advanced driver-assistance systems—are expected to grow at a 29% CAGR over the next decade. Ontario’s auto sector can be a key customer and collaborator in this space.

National Security and Economic Resilience
Semiconductors are not just economic assets—they are national security imperatives. Countries are increasingly treating chip production as a matter of sovereignty. Canada must do the same. Domestic fabrication would:
- Protect against supply chain shocks
- Support defense and aerospace innovation
- Enable secure infrastructure for AI and quantum computing
Ontario’s leadership in defense tech and AI makes it a natural partner for federal initiatives in secure chip production.

Policy Recommendations
To make this vision a reality, Canada and Ontario must take bold steps:
- Launch a National Semiconductor Strategy: Include fabrication as a core pillar, with clear targets and funding.
- Create a Canadian Semiconductor Fund: Similar to the U.S. CHIPS Act, offer multi-billion-dollar incentives for fab construction.
- Designate Ontario as the Semiconductor Capital: Establish a federal-provincial task force to coordinate investments, workforce development, and infrastructure.
- Partner with Global Leaders: Attract companies like TSMC, Samsung, and Intel to build fabs in Ontario through joint ventures and incentives.
- Invest in Talent Pipelines: Expand STEM education, vocational training, and R&D funding to support the semiconductor workforce.

Conclusion: A Defining Opportunity for Canada
The global semiconductor race is not just about chips,it’s about leadership in the technologies that will define the next century. Canada cannot afford to sit on the sidelines. By investing in semiconductor fabrication and focusing on high-end chips, we can secure our place in the global tech economy.
Ontario, with its unmatched ecosystem, must lead this charge. The province has the talent, infrastructure, and ambition to become Canada’s semiconductor capital. What’s missing is a coordinated national push,and the political will to make it happen.
The time to act is now. Canada’s future in AI, clean energy, and advanced manufacturing depends on it.