Chapter 1: A Brief History of Chips
After World War II, Bell Labs invented the transistor, a breakthrough that would gradually replace vacuum tubes and enable the miniaturization of electronics. Before powering personal computers and smartphones, this technology first served U.S. military interests, particularly in guidance systems, communications, radar, and onboard equipment. Semiconductors quickly became a strategic asset for national defense.
In the decades that followed, the United States made a series of breakthroughs: integrated circuits, the first microprocessors, Silicon Valley, Intel, and the entire modern computer industry. Indeed, for a long time, it was the Americans who dominated scientific advancements, production, and the commercialization of chips.
Starting in the 1970s, Japan began investing heavily in the semiconductor industry. Driven by an ambitious industrial policy, companies such as Toshiba, NEC, Hitachi, and Fujitsu quickly became recognized global players. By the late 1980s, a country once associated with “cheap” consumer electronics was now seen as a serious threat to American technological dominance—a producer of high-quality, reliable chips at very low cost.
Then Taiwan entered the scene.
The island took a different approach. Rather than trying to compete with Intel or Japanese manufacturers on all fronts, it specialized in manufacturing on behalf of other companies. In 1987, Morris Chang founded TSMC and popularized a model that would transform the industry: the pure-play foundry. The idea is simple: some companies will focus on chip design, while others will concentrate solely on manufacturing them.
This specialization allows the industry to become more efficient and paves the way for a new generation of tech companies. NVIDIA, AMD, and several others can now develop chips without having to build their own factories.
I also recommend that anyone interested in the subject and looking to learn more read Chip War, a book that traces the history of semiconductors and explains how a component measuring just a few millimeters has become one of the most strategic assets in the global economy.
Chapter 2: The Ecosystem Today
The semiconductor industry is now one of the most specialized in the world. Like many other complex manufacturing sectors, no single country controls the entire value chain on its own.
This value chain is supported by several types of companies: chip designers (fabless companies) such as NVIDIA in the United States, specialized manufacturers (foundries) such as TSMC in Taiwan, integrated players such as Samsung in South Korea, as well as companies dedicated to assembly, packaging, and testing. Added to this are the suppliers of software, equipment, materials, and intellectual property that make the whole process possible. In reality, very few companies control the entire value chain. Most instead occupy a very specific niche where they develop expertise that is difficult to replicate.
The technical complexity, the required investments, and the economies of scale have become so significant that it is now nearly impossible for a single country or a single company to do everything on its own.
Chapter 3: O Canada
In Canada, we have never sought to become a mass-manufacturing powerhouse on par with Taiwan or South Korea (nor have we ever made the necessary investments to do so). We lack both the production volumes and the capital needed to compete with global giants on their own turf.
Instead, Canada has developed expertise in specialized niches: photonics, MEMS, specialized sensors, quantum technologies, and certain advanced manufacturing and assembly processes.
The strategic rationale is this: in an industry as fragmented and specialized as the semiconductor industry, the most strategic positions are not always those that produce the largest volumes.
Technological sovereignty has become an unavoidable issue. When this topic is discussed, the conversation often revolves around the reshoring of the value chain. However, it is important to keep in mind that the world’s most advanced facilities—such as those of TSMC, Samsung, or Intel—represent investments of tens of billions of dollars. It would be naive to believe that Canada can compete directly with these giants.
Other avenues exist.
Chapter 4: Working Together in Quebec to Build Our Position
In an industry as specialized as the semiconductor industry, value isn’t found solely in mass production. It also lies in the ability to develop, test, scale up, and manufacture emerging technologies that haven’t yet reached the scale of major markets.
We have several strengths that will help us succeed:
First, we have a world-class research base. Quebec has carved out an enviable position in several fields directly related to the next generation of semiconductors, including integrated photonics, artificial intelligence, advanced materials, and quantum technologies. Organizations such as the Quantum Institute, 3IT, and MILA help fuel a significant pool of talent and knowledge.
Next, we can rely on facilities for technology validation and pre-industrialization, such as the CPFC, 3iT and C2MI. These facilities support advanced prototyping, process development, industrial qualification, and the initial stages of production. They play an essential role in bridging the gap between research and industry, particularly in emerging fields such as advanced packaging, which is becoming a strategic issue for the next Generation of chips.
Finally, we possess specialized manufacturing capabilities. The Bromont ecosystem, with players such as IBM and Teledyne, brings together expertise that is difficult to develop and even more difficult to replicate. Although they cannot compete with Asian megafabs in terms of volume, these facilities provide a solid foundation for the industrialization of emerging technologies.
If Quebec plays its cards right, it will not become a global semiconductor giant. However, it could become one of the few places in North America capable of industrializing some of the most advanced technologies of the next generation of computing.