As technology is increasingly integrated into daily life, semiconductors are growing into a trillion dollar industry.
Semiconductors are essentially the middle ground for materials that conduct electricity, called conductors, and those that don’t, called insulators. Frequently made of silicon, semiconductors are used in the creation of a product you may be more familiar with — microchips.
Vallen Rezazadeh, CEO and founder or TransEON, a semiconductor startup based in the Edmonton region, said that while hardware like computers are a big focus, semiconductors are a bit quieter of an industry, despite them being the basis for these products.
“There’s so much in the public eye about the applications and what you can do with computers, but nobody ever really talks about how you actually make them.”
As they are used in the production of microchips, it’s no surprise that the semiconductor market has had strong annual growth, more than doubling in value over the last 20 years. Despite the industry’s growth, the majority of semiconductor manufacturing is localized in Taiwan.
As of 2021, 63% of the world’s semiconductors are manufactured and exported from Taiwan, alongside 18% and 6% coming from South Korea and China, respectively.
Rezazadeh attributed this domination of the semiconductor field of places like Taiwan and South Korea to the strength of their government support.
“Over the past 40 years, their governments realized that the semiconductor industry was going to blow up — it’s going to be an essential cornerstone of the modern economy – we have to ensure we have a piece of this. So, these governments provided them with subsidies and support to make that happen.”
With this focus on chip production in East Asia, any interruption in exports can cause a chip shortage, as was seen during the COVID-19 pandemic.
When semiconductors are used in everything from cell phones to cars and solar panels, the best way to ensure we maintain our supply of microchips and capitalize on the success of the semiconductor market, is to increase the number of semiconductors made in Canada — something the federal government is already working towards.
Some of the world’s largest semiconductor producers and designers are already attracted to Canada’s trade agreements, budget-friendly utilities, skilled workforce, institutional backing, and advances in artificial intelligence (AI). With the Edmonton region housing major AI companies such as AltaML, and initiatives such as Amii (Alberta Machine Intelligence Institute) and ISAIC (Industry Sandbox for AI Computing) along with, open-access resources like nanoFAB, and a large student population, the region marks a key location in Canada’s semiconductor industry.
Rezazadeh added that in the time since he graduated from the University of Alberta in 2016, there weren’t many big semiconductor manufacturers in the region — a key part of the decision that drove him to the United States for work.
“I wanted to work on cutting-edge development … then I decided that I wanted to come back [to the Edmonton region] and start a company because I really wanted to change the environment here — I wanted to be a part of creating the [semiconductor industry] and fostering it. “
“We’re at risk of losing tons and tons of human capital … now that the United States has injected money into their semiconductor industry, that brain drain is just going to get worse,” Rezazadeh added. While the Edmonton region is ranked first in Canada for our engineering talent, not investing in our semiconductor industry could risk that.
The Edmonton region is already recognized for its manufacturing productivity and vibrant technology market. It is also home to the previously mentioned nanoFAB, an open-access facility for academic and industrial micro- and nanoscale fabrication and characterization. With their CREATE 2.0 proposal, the nanoFAB is positioning itself as a potential key player in the semiconductor industry. The CREATE 2.0 proposal will focus on guiding the development and scaling of semiconductor manufacturing in Alberta.
Eric Flaim, director of nanoFAB at the University of Alberta, draws a parallel between the semiconductor industry and the automotive sector. Canada and the United States have a highly integrated automotive sector because of investments made at the component level — with thousands of parts shipped across the continent daily, said Flaim. “A similar approach is being explored for semiconductors now.”
Rezazadeh noted that many kinds of semiconductor manufacturing, such for chips used in cars, is shifting focus away from Taiwan and Asia. “While Asia still holds a significant share, the barriers to entry for this segment are much lower, making it a lucrative part of the market that many are overlooking.”
By leveraging nanoFAB’s long history of operations, success and leading capabilities, and adopting a component-level investment strategy, the Edmonton region can establish itself as a semiconductor manufacturing hotspot, attracting global attention and investment.
Flaim explained that nanoFAB “builds on a long history of sustainable operations providing technical capabilities and services to academic researchers and industry partners to develop, advance, and commercialize hardware technology or hard tech products utilizing micro- and nano-scale fabrication.”
Flaim added that the benefit of using an open-access model such as the nanoFAB comes from the reduced administrative and cost barriers for industry utilization achieved through professionally managed shared capabilities.
“We can distribute the cost of these very expensive capabilities over a large number of innovators, entrepreneurs, researchers, to drive down the barrier for working with these technologies.”
“It’s providing access to things that people couldn’t get ordinarily,” added Rezazadeh. The Edmonton region has a great foundation, he added.
And they have plans to grow.
“We’re talking about building on things that we already have,” said Flaim. “Having the homegrown manufacturing capabilities for these high technology components [like chips] is critically important.”
“Making an investment into [semiconductor production] locally, can put you on the map globally, as a place where this kind of work can be done,” Flaim added. “Right now, there’s a race to identify where there’s local expertise, local capabilities, a local ecosystem where people can make investments to establish their companies for making varying semiconductor-based devices.”
With local expertise from our over 4,000 science, technology, engineering, and mathematics (STEM) grads in 2021, combining with the capabilities of facilities like the nanoFAB, the Edmonton region is an ideal hub for semiconductor industry and investment.
“Over the past five, maybe six years, we’ve seen huge growth in this industry,” said Rezazadeh. “There’s so many companies that have popped up locally in the last five years due largely to the equipment they’ve been able to access through nanoFAB. We now have some of the most cutting-edge capabilities in Canada.”
“Even for a company like mine, immediately we’re able to access tools that we need for increasing our volume and getting our product out to market faster.”
Rezazadeh continued, “We can start producing commercial scale components that could go into pretty much everything and could capture over $300 million worth of market.”
“It’s not a single sector sort of thing. The nanoFAB is an enabling technology for so many things. Semiconductors, quantum, energy and sensor devices are enabled by the nanoFAB. “
The Edmonton region is at the cusp of becoming a global leader in semiconductor manufacturing — through our thriving ecosystem, skilled work force, and cutting-edge facilities like nanoFAB — the potential for growth is tremendous.
Supporting the nanoFAB’s CREATE 2.0 initiative, a project that will drive small- and medium-scale semiconductor manufacturing, is critical. CREATE 2.0 will feature a multi-sector focus that can specifically fit the needs of industrial powers in the Edmonton region.
Just as other countries have done and seen success with, now is the time for the provincial and federal governments to direct investment into this growing market and into our homegrown talent.
