In today’s rapidly shifting geopolitical and technological landscape, semiconductors have become one of the most critical strategic resources in the world. They are no longer just components inside consumer electronics; they power electric vehicles, AI systems, military equipment, telecommunications networks, medical devices, and critical national infrastructure.

Yet, despite being a technologically advanced country with strong research capabilities, Canada lacks even a single full-scale semiconductor foundry. Our complete dependence on foreign nations,primarily the United States, Taiwan, South Korea, and increasingly China,creates a dangerous vulnerability in an uncertain global environment.

Canada must urgently establish at least one domestic semiconductor foundry, supported through a mix of public and private investment with strong government backing, to secure our technological sovereignty, strengthen national security, and unlock long-term economic growth.

Semiconductors: The New Oil of the 21st Century

Semiconductors are often compared to oil because of their strategic importance in powering modern economies. Without secure access to chips, entire industries grind to a halt.

During the COVID-19 pandemic, global chip shortages forced Canadian automotive plants to shut down or reduce production. This wasn’t due to lack of demand, skills, or resources,it was because Canada had to wait for supply from overseas fabs.

In a world where geopolitical tensions are rising, trade wars are increasing, and supply chains are becoming tools of political leverage, relying entirely on foreign semiconductor production is an unacceptable risk.

If Canada loses access to critical chips due to a Taiwan Strait conflict, trade disputes, or export controls, our economy, healthcare systems, defense infrastructure, and energy grid security would be directly affected.

A sovereign nation must control access to its most critical technological components.

Why “At Least One Foundry” Is Crucial

The goal is not to immediately compete with global giants like TSMC or Samsung at the bleeding-edge 2nm level. Instead, Canada should aim for a strategic, multipurpose foundry focused on:

Automotive & EV chips

Power semiconductors for energy systems
Chips for aerospace and defense
Industrial and IoT components
Mature nodes (28nm – 90nm) that still drive massive global volume

Even a single advanced foundry would:
Secure critical supply for key industries
Anchor an entire semiconductor ecosystem
Attract global investment and partnerships
Provide strategic backup for allied nations
Reduce dependence on foreign manufacturing

This is about national resilience, not just technology.

Geopolitical Reality: Dependence is a National Security Risk

The current global semiconductor supply chain is heavily concentrated in East Asia. Taiwan alone controls over 60% of global foundry capacity and nearly 90% of advanced chip manufacturing.

Given the increasing tensions between China and Taiwan, this concentration represents a massive strategic risk.

Canada, as a G7 nation and a key NATO ally, cannot afford to remain vulnerable in such a scenario. Any large-scale conflict, sanctions regime, or supply disruption would directly impact:

Canadian military readiness
Medical equipment availability
Energy infrastructure security
Transportation and logistics
Digital and AI ecosystems

Other countries understand this risk very well.
The US has passed the CHIPS Act.
The EU has its own Chips Act.
Japan and South Korea are heavily investing in domestic capacity.

Canada cannot stay on the sidelines.
A Public–Private Investment Model with Strong Government Backing
Building a semiconductor foundry is extremely capital intensive. A modern fab can cost between $10 billion to $20 billion.
This cannot be done by the private sector alone.

Canada needs:

A public–private partnership model
Direct government grants and subsidies
Tax incentives for investors
Long-term strategic procurement commitments
Infrastructure and energy support
Just like Canada invested heavily in:
EV battery plants
AI research hubs
Quantum computing centers
Clean energy infrastructure
We must now treat semiconductor manufacturing as critical national infrastructure.

This investment is not a cost , it is an economic multiplier.

Strengthening Canada’s Investments in AI, EVs, and Quantum Computing

Canada is already investing heavily in futuristic technology sectors:
Artificial Intelligence

Electric Vehicles
Quantum Computing
Clean energy and battery technology
Advanced manufacturing

But all these sectors depend on advanced chips produced outside Canada.
This means we are building the car but importing its engine from another country.By developing Canadian-made semiconductors, these industries will gain:

Faster R&D cycles
Greater cost stability
Stronger national security
Vertical integration advantages
Reduced exposure to supply disruptions

Imagine Canadian AI supercomputers running on Canadian-designed and Canadian-manufactured chips.
Imagine Canadian EVs powered by Canadian semiconductors.
Imagine our quantum computing research backed by domestically produced specialty chips.

This creates an innovation loop entirely inside our national ecosystem.
Economic Growth and High-Skill Job Creation
A semiconductor foundry is not just a factory ,it is the nucleus of an entire ecosystem.

It leads to:

High-paying engineering jobs
Materials science and chemical jobs
Equipment manufacturing
Research laboratories
Startup ecosystems around chip design and advanced systems
University-industry collaboration
Countries that host fabs become global innovation hubs.
Canada already has strong universities like:
University of Toronto
University of Waterloo
McGill University
UBC

But many semiconductor talents leave for the US due to lack of local manufacturing opportunities.

A domestic foundry will help:
Retain Canadian talent
Attract global experts
Create long-term high-value employment
Position Canada as a serious technology manufacturing nation
Leveraging Canada’s Natural Advantages
Canada has several strategic advantages few countries possess:
Abundant clean hydroelectric power
Large reserves of critical minerals (nickel, cobalt, lithium, rare earths)
Stable political environment
Strong rule of law
Access to US and global markets
Highly educated workforce

Semiconductor manufacturing is energy-intensive. Having access to clean and inexpensive power gives Canada an edge over many regions.

Instead of exporting raw resources, Canada should move up the value chain and convert natural resources into high-value technology products.

The Cost of Inaction
If Canada doesn’t act, the consequences will show over the next decade:

Continued dependence on foreign supply chains
Loss of advanced manufacturing opportunities
Continued brain drain to the US
Weakened national security position
Marginalization in future technology ecosystems

In a world where technological sovereignty is becoming as important as energy or food sovereignty, not having domestic chip manufacturing will be a critical strategic error.

Conclusion: A Defining National Project

Building at least one major semiconductor foundry should be treated as a national strategic project, similar to:
The Trans-Canada Highway
The Canadian railway system
The St. Lawrence Seaway
The Canadian space program

It will require vision, long-term thinking, investment, and political courage.

But the payoff will be enormous:
National security
Economic leadership
Industrial independence
Technological sovereignty
Stronger future for Canadian innovation

Canada has already taken bold steps in EVs, AI, and quantum computing.
The next logical step is empowering these industries with Canadian-made chips.

We cannot afford to rely completely on other nations in this increasingly unstable geopolitical environment.
Now is the time to invest ,not just for growth, but for sovereignty.