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Making the case for a homegrown Canadian semiconductor industry
- 908B64B197 6y agoRemember the C-Series plane? Trudeau did absolutely nothing for the industry and immediately bowed down to Trump after he slapped tariffs later judged to be illegal. Well, not exactly, there was whining and a vague threat to switch an order of fighter jets from Boeing to Lockheed. Couldn't inject a little bit of capital at the right time. Airbus swooped in and bought the whole thing at a heavy discount. Engineering shipped to France and manufacturing to Alabama. And now Canadians expects a big investment in semi-conductor for highly experimental fabs?
- belval 6y agoCanada is basically just an economic extension to the US. I find it funny when people talk about us developing our own industry for X. We don't do that. Our approach is to be a pool of specialized and culturally similar people for the US to use as cheaper labor (when the loonie is low).
- steve_adams_86 6y agoYou’re not wrong, but this actually illustrates why we need to establish industry to counteract this problem. What you’re describing will always be true if we don’t have the initiative to correct it. This stuff seriously concerns me because apart from natural resources, we have very little to leverage. I worry for my kids and their kids. Canada is in a very precarious economic and political position from my perspective.
- bushbaba 6y agoCanada has lots and lots of fresh water. And global warming will open lots of farm land. Could easily see Canada become the agricultural leader of North America.
- vkou 6y ago> Could easily see Canada become the agricultural leader of North America. The agricultural leaders of <anything> are countries that are nearly universally dirt-poor.
- kenhwang 6y agoThen there's California, arguably North America's current agricultural leader.
- vkou 6y agoCalifornia isn't rich because of agriculture. It's a rich state that happens to do some agriculture.
- systemBuilder 6y agoIllinois is 100% agriculture. All the tech from Schaumburg and Naperville (W. Chicago) has been hollowed out. It's still relatively rich as a state ... You are forgetting that until recently in Brazil the USA had double the agricultural productivity of any place else on Earth...
- refurb 6y agoChicago GDP = $619B IL GDP = $897B Agriculture is a small fraction of what IL produces.
- eru 6y agoThe Dutch disagree. (Not just now, but also historically.)
- ChuckNorris89 6y agoExcept that the Netherlands aren't rich because of their agriculture. They're rich and happend to be good at agriculture on the side as an added bonus.
- eru 6y ago> You’re not wrong, but this actually illustrates why we need to establish industry to counteract this problem. Who is we?
- steve_adams_86 6y agoSorry - we is Canada in this case. I didn’t make that clear.
- rhodozelia 6y agoCanada used to count Avro and Bombardier in their aerospace industry. We used to have Nortel and blackberry as leaders in telecommunications. We can have our own industry for X and we can be competitive world leaders in it.
- NonEUCitizen 6y agoYou have (present tense) Shopify.
- kenhwang 6y agoI think it's even more degrading than that. Canada basically exports healthy, educated, wealthy people to the US for little in return (well, other than being best friends with the world superpower anyway). As long as there's favorable compensation and tax policies on the US side, Canada's brightest, healthiest, and wealthiest will just hop over to benefit from the more favorable conditions there after reaping the expensive taxpayer funded social benefits (healthy upbringing, affordable higher education).
- spir 6y agoIt's true and sad.
- david-gpu 6y ago> Canada's brightest, healthiest, and wealthiest will just hop over to benefit from the more favorable conditions there after reaping the expensive taxpayer funded social benefits The bulk of Canadian taxes are paid by the "brightest, healthiest and wealthiest" [0], so the expensive social benefits Canadians enjoy are largely funded by extracting taxes from these people, not the other way around. Thus, I can hardly blame them for moving to a place where they don't have to subsidize others as much. [0] https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110005501&pickMembers%5B0%5D=1.1&pickMembers%5B1%5D=3.5&cubeTimeFrame.startYear=2014&cubeTimeFrame.endYear=2018&referencePeriods=20140101%2C20180101 https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=111000...
- BeetleB 6y agoNice argument, but when you look at the data, it doesn't make sense. According to your link, the top 10% of Canadians pay about 50% of the taxes in Canada. In the US, the top 10% pay a larger share: 70% (although this is only federal data).[1] So moving to the US to avoid subsidizing others is probably not the best rationale. [1] https://taxfoundation.org/summary-of-the-latest-federal-income-tax-data-2020-update/#_ftn1 https://taxfoundation.org/summary-of-the-latest-federal-inco...
- kenhwang 6y ago
- iamshs 6y agoSo much of Canadian tax payer money has been poured into Bombardier. What could Trudeau do when Boeing had won the case in a US court against Bombardier, which allowed Airbus to swoop in?
- 908B64B197 6y ago> when Boeing had won the case in a US court against Bombardier They didn't win https://www.cbc.ca/news/business/bombardier-boeing-tariffs-1.4505114 https://www.cbc.ca/news/business/bombardier-boeing-tariffs-1...
- throw0101a 6y ago> Trudeau did absolutely nothing for the industry and immediately bowed down to Trump after he slapped tariffs later judged to be illegal. (a) The amount of money funnelled into Bomardier was a lot, and BBD was/is IMHO not much more than a personal piggy back for the founding family who still runs thing. The two-class shares are crazy and should have been eliminated in any one of multiple bailouts that the company received over the years/decades. (b) Canada has put retaliatory tariffs on all sorts of products when the US has acted in a silly fashion (and not just under Trump): it doesn't do much because of the relative sizes of the two countries.
- Pxtl 6y agoSo the FP is taking a break from partisan hackery to do a puff-piece to drum up some investment?
- hourislate 6y agoThe article didn't even mentioned ATI or Matrox?
- natrik 6y agohttps://assets.bwbx.io/images/users/iqjWHBFdfxIU/iroikDYIT5QE/v0/-1x-1.png https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iroikDYIT5Q... Canada's deficit is among the worst of all relevant countries at the moment.
- enriquto 6y agoWhich countries are irrelevant? By the way, your graph only shows the data for Canada. I guess the rest of the countries are irrelevant?
- klyrs 6y agohttps://en.m.wikipedia.org/wiki/List_of_countries_by_current_account_balance https://en.m.wikipedia.org/wiki/List_of_countries_by_current... Per capita, our debt is comparable to the US
- natrik 6y agoWikipedia data says (2017) https://www.visualcapitalist.com/debt-to-gdp-continues-to-rise-around-world/ https://www.visualcapitalist.com/debt-to-gdp-continues-to-ri...
- SketchySeaBeast 6y agoThe graph is for the growth of debt to GDP - we previously had lower debt and so the need to react to COVID caused the debt to grow by quite a bit as CERB was implemented to try and keep people liquid. I can't find any break downs of 2020 in terms of actual debt to GDP, but the chart supplied definitely isn't telling the whole story.
- igammarays 6y agoYes but Canada cannot afford that much of debt because our dollar is not a global reserve currency with a massive standing army.
- Proven 6y agoDon’t
- throwawaysea 6y agoI don’t understand the case exactly. Is it that there’s room to innovate (like WeavAir, the startup they feature early in the article) or that there’s unmet demand (what the article references with COVID semiconductor shortages)? Certainly innovations can create markets on their own but I don’t see a temporary shortage as being some kind of opportunity to break into the industry. What would they do - build fabs? And if so why would they be able to do that any faster than others? Where will Canada get all the talent something like that requires, not to mention the capital? The article later focuses on winning niche portions of the semiconductor market - which may be feasible if they innovate ahead of others. But it’s easy to wish for that and hard to realize it, especially given all the barriers to business in Canada (tax policies etc).
- polishdude20 6y agoYeah what's not evident to me is how Canada has the upper hand in this? If it can be done in Canada, it can be done in the US (and pay better)
- andromeduck 6y agoWell we produce enough high quality graduates from our colleges and many would would love nothing else but to stay and apply their trade where they have built up connections but at present that connection does not outweigh the massive drag that is our housing crisis & tax policy. Even if one wished to settle in Vancouver for example, one would still be better off working down south for 5-10 years to save up for a nice house or apartment but by then all your friends are down there so you may as well stay.
- Animats 6y agoThere's no reason Canada shouldn't have more fabs. It has Teledyne DALSA, making mostly imagers and some MEMS parts. Canada has a bigger population than Taiwan, after all.
- xadhominemx 6y agoYes there is one very important reason which is that Canada has zero semiconductor manufacturing expertise or legacy. Who is going to design, manage, and operate the plants? And who are the customers going to be?
- sbierwagen 6y agoWell, how did Taiwan start? At the time, they would have been competing directly with the US. The US had to possess every advantage: money, skilled labor, all your customers in the same country. Why did all the fabs uproot and move across an ocean?
- xadhominemx 6y agoHow did Taiwan get its start... well, people there invented the foundry business model 30 years ago when barriers to entry in semiconductor manufacturing where much much lower than they are today. China has sunk hundreds of billions into the industry and is barely making a dent.
- jdmg94 6y agoWell, Canada does manufacture other types of chips, there’s a huge case of brain drain to the US, we just need the government to incentivize Canadians who work in tech to stay in Canada
- xadhominemx 6y agoThe minimum scale for a fab these days is thousands of employees... so it’s not a simple matter of keeping a few years of college grads in the country.
- MattGaiser 6y agoCanada needs to focus on retaining the tech capacity that it has. https://financialpost.com/news/economy/virtual-brain-drain-pandemic-immigration https://financialpost.com/news/economy/virtual-brain-drain-p...
- yitianjian 6y agoLOL I interviewed for Delvinia, and their offer was tremendously under market. Good riddance.
- MattGaiser 6y agoNo wonder Asking Canadians surveys were such a pain when I did them.
- goodcanadian 6y agoI hate to bang on about it, but as a Canadian who has worked in the U.S. and who is now in the U.K., I've tried hard to land a good position in Canada. Very few opportunities seem to exist, and the ones that do pay a pittance. In my experience, it is not 30% higher in the U.S. as the link indicates, but more like 100-200%. A couple of years ago, I was offered a highly technical position with a salary below what I had been paid 15 years prior. It was not really even going to cover the basic cost of living for my family. All I can say is, if you own a company in Canada, you need to work on interesting problems and pay well. Then, you will have your pick of top quality talent. If you are having trouble getting staff, you probably need to about double your salaries.
- Mumps 6y ago(might not add much) But this has been my experience as well. People like to point out that CAD has better social support than US - fine, a paycut may balance out there. But that's nowwhere near the differential I get here in the UK _plus_ the social support here has been far superior to CAD. I interview with CAD companies from time to time and make a point of stating salary/equity requirements on par with the leading global market. Once they match, I'll be back.
- systemBuilder 6y agoIt's a commodity business. Buy somebody's used 32nm fab and ship it to Canada if you want a toy to play with . .
- PicassoCTs 6y agoThis touches a problem democracy inherited from the market participants it tries to emulate in the west nowadays. Longterm commitment to plans. It makes no sense to support projects short term, only then to hand the developed fruits of labour over to those capable to longterm commit to development. This is also the most valuable trait a government can bring to the market, as it is a system usually optimized for exploring local optima, but incapable to traverse the ridges of the research landscape by itself to new "hunting grounds". In germany, a semi-conductor industry was existing and was given up, as further development would have needed propping up by government. Solar was developed and then fed to the wulfes locally, as entrenched energy providers sabotaged the support the young industry would have needed against chinas cheap manufacturing. And this pattern has played itself out over and over in western markets. Shortsighted entrenched interests sabotage "new Players" who venture to those capable to commit. So even, if at this moment, all parties agree to commitment, how longterm will this commitment be. Why should someone migrate from Taiwan to Canada, only to participate in a re-enactment of a short term "desert-flowering" of a chip industry? Nobody would try to make a career on such shifting grounds. You cant built a cathedral on sand.
- konschubert 6y agoGermany chose cheap solar over homegrown solar. It is not clear to me that German solar could have become as cheap as Chinese solar with the old subsidy scheme.
- aww_dang 6y agoThere's also the subsidies provided by CCP central planners to consider. This subsidizes consumption in their target markets. I appreciate the strategic concerns. However, the obvious benefit of a foreign nation subsidizing your consumption shouldn't be overlooked. Some of the knee-jerk reactions to central planning suggest that the western nations should emulate the CCP's statist system. To be sure there are pragmatic concerns, but more concerning is the race to the bottom of top down planning this creates. Government bureaus will always find a rationale to expand purview of the state. Specifically, if photovoltaic solar isn't cost effective without subsidies, then why use it? When the state chooses winners and losers, it distorts the incentive based progression of technology. By narrowly focusing on artificially profitable PV solar, more efficient innovations may be overlooked. There's always an unseen cost when central planners misallocate resources away from profitable industries. Pragmatists' best case might be that strategic concerns outweigh the losses of productivity and employment.
- newsclues 6y agoDid ATI ever have fabs in Canada?
- andromeduck 6y agoLol no.
- yabones 6y agoCanada has a long and shameful history of our innovations being screwed up or screwed over. In the 50s our fighter/interceptor was leagues better than the US's jets, but crooked politicians killed the project. In the 70s our CANDU reactors were safer and cheaper to run than the PWRs the Americans were exporting, somehow we lost out on that too. More recently Bombardier built some of the nicest small passenger jets, and now that's owned by foreign companies. The brain drain is endless. If this project took off, our leaders would roll over in a second to sell it off, it's the proud tradition here.
- quercusa 6y agoExcellent article on the Avro Arrow: The project was genuinely ground-breaking. Avro’s engineers had been allowed to build a record-breaker without compromise. But Canadians would soon discover that the supersonic age had made aviation projects so expensive that only a handful of countries could carry them out – and Canada, unfortunately, wasn’t one of them. https://www.bbc.com/future/article/20200615-the-record-breaking-jet-which-still-haunts-a-country https://www.bbc.com/future/article/20200615-the-record-break...
- 908B64B197 6y agoThe Avro was a supersonic bomber interceptor that was going to be ready in the 1960's. It was good at one thing and one thing only (allegedly, it never flew at speed even close to the spec). It was made to counter a hypothetical supersonic bomber that the soviets never built. Sputnik made them obsolete!
- mmmBacon 6y agoAmy Shira Teitel, a Canadian spaceflight historian and author of Fighting for Space: Two Pilots and Their Historic Battle for Female Spaceflight. “But Canada is obsessed with Canadiana, and the Arrow was revolutionary. It was a Mach 2 jet on par with the United States