Can Canada capitalize on semiconductors?

As the global semiconductors arms race gets hotter than a ten-year-old laptop trying to run a browser with multiple tabs open, one Canadian chip leader just got a lot less Canadian. 

What happened: German chip leader Infineon Technologies will acquire Ottawa-based semiconductor chip company GaN Systems for a cool US$830 million.

  • GaN specializes in using a special compound to make components for chips that are smaller, lighter, faster, and more energy efficient than traditional ones.
  • GaN has delivered to over 2,000 customers, including BMW, Dell, and Samsung, and shows tremendous promise for emerging green technologies. 

Why it matters: This deal is good news for GaN, but some experts find it troubling for Canada. GaN is one of the leading lights of Canada’s chip industry, and now it’s the latest entry in a long list of promising Canadian tech companies that have left the country.

  • Canada was once a leader in semiconductors, but an openness to foreign competitors and a focus on research over commercialization meant that promising companies like TundraDALSA, and Gennum Corp were snapped up by foreign corporations.

  • There are growing concerns that this could happen all over again. In a Globe and Mail op-ed, two Council of Canadian Innovators leaders wrote, “that cutting-edge semiconductor research funded at Canadian universities is ultimately scooped up and commercialized by foreign companies because we have no national strategy.”

Zoom out: A 2021 OECD report projected Canada would fall to last place out of the 38 member nations for GDP growth by 2030. Avoiding that indignity means getting the most out of Canadian innovation, whether in semiconductors or any other emerging tech.