The semiconductor supply chain squeeze continues to make headlines following the rumblings caused by the COVID pandemic. The recent visit to Taiwan by Speaker of the United States House of Representatives Nancy Pelosi reminded companies of all sizes that the global semiconductor chip supply chain is fragile.
Now a committee of Canadian MPs is seeking budget approval for a trip to Taiwan in the fall that would aim to improve trade relations between Canada and Taiwan, despite fears it could further antagonize China.
More background: Pelosi is the highest-ranking member of the US government to visit Taiwan in 25 years. According to an opinion piece by Pelosi, his “visit is part of our wider Pacific journey – including Singapore, Malaysia, South Korea and Japan – focused on mutual security, economic partnership and democratic governance. “. Beijing considers Taiwan to be part of its territory and claims it has no right to conduct foreign relations independently. As Taiwanese officials welcomed Pelosi, the Chinese military responded by sending missiles, warships and warplanes into the seas and skies around Taiwan.
Supply fears return: In addition to the exercises, Beijing blocked imports of fruits, fish and other foods from Taiwan after Pelosi arrived on the island. Currently, the Taiwan Semiconductor Manufacturing Company (TSMC) produces 53% of the world’s chips, and Taiwan-based companies produce an additional 10%. Fortunately, China has not disrupted the flow of semiconductors or other parts, but the tension is a reminder of supply vulnerability.
Where are semiconductors found? The real question is, where can’t you find semiconductors? When people talk about semiconductors today, they’re usually referring to semiconductor chips, found in smartphones, hospital equipment, vehicles, computers, fighter jets, and more. .
Why should Canada care? Although Canada is home to offices for many global semiconductor leaders like TSMC, Samsung Electronics, AMD, Qualcomm and Intel, their “Canadian footprint is limited compared to their headquarters elsewhere,” said Melissa Chee, President and CEO of ventureLAB, a leading technology company. hub for hardware and semiconductor founders located in Markham, Ontario.
Without being a dominant player in the semiconductor ecosystem, Canada runs the risk of depending on Taiwan for semiconductor supplies. This can be a major problem in the face of a pandemic, wars and trade blockades.
Chee, who is a member of the Semiconductor Council of Canada, said that to be globally competitive in the semiconductor industry, “Canada must report significant investment in its domestic sector throughout the Supply Chain. We need a strong domestic industry that includes startups, multinationals and investors to create an ecosystem that both keeps Canadian companies here and attracts global industry leaders.
Next steps? If the committee of Canadian MPs gets the go-ahead to travel to Taiwan, Chee hopes the visit will spark a discussion about whether TSMC should expand its semiconductor design and manufacturing capability in Canada.
An essential partnership
Taiwan is not the only country with which Canada is looking to do more business. A visit by German Chancellor Olaf Scholz this week resulted in multiple agreements between the two countries.
The federal government has signed two new memorandums of understanding with Volkswagen and Mercedes-Benz that will see German automakers secure access to Canadian raw materials for electric vehicle batteries.
Quick fact: China produces most of the world’s mineral-rich components for battery cells, including 70% of cathodes, which can be half the cost of a manufactured cell.
The agreement with Volkswagen will focus on the manufacture of sustainable batteries, the production of cathode active materials and the supply of critical minerals, while the agreement with Mercedes-Benz will focus on improving collaboration with Canadian companies throughout the electric vehicle and battery supply chains.
The agreements come amid a significant shift towards clean energy solutions such as electrification, wind, solar and nuclear. To keep up with this pace, the production of many critical minerals and metals will need to increase by nearly 500% over the next 20 to 30 years. In addition, a heavy reliance on China for these minerals could create supply backlogs.
“We’ve got it all,” said Jayson Myers, CEO of advanced manufacturing organization NGen, who attended a meeting with Trudeau and Scholz in Toronto. “Canada has a democratic government that respects the environment, a strong mining sector, and artificial intelligence and quantum computing technology that can be applied to manufacturing batteries in electric vehicles.
Upcoming challenges: Gary Agnew knows how difficult it is for mining companies to “target and quantify economically viable deposits, especially when most near-surface deposits have already been discovered”. There is the added difficulty of extracting and processing the minerals quickly and with minimal environmental impact, often in remote areas where the weather is harsh.
As co-founder and CEO of Ideon Technologies, his company leverages cosmic-ray muography to provide visibility up to a kilometer below the Earth’s surface, much like an X-ray or MRI. The technology allows mining companies to identify anomalies such as deposits of minerals and metals. This can reduce the amount of drilling, which means less expense and fewer emissions.
“While there are still many questions about the practicalities of implementation, what we are seeing are two of the largest and most established automakers in the world looking to Canada to help develop a solution for the global transition to clean energy. Whichever way it plays out, it can only be good for Canada, for the automotive, mining and tech industry, and for the consumer in the end.
Offers on offers on offers: The production and supply of critical minerals is not the only thing Germany and Canada have agreed on this week. With the ongoing war in Ukraine, many European countries are trying to distance themselves from Russia and its fuel supplies. That’s why the Canadian and German governments have signed a cooperation agreement on the export of hydrogen fuel to Europe, targeting 2025 to begin shipments from Eastern Canada.
What are the experts saying? “It’s one thing to say you’re going to do it, but it’s another to actually do it,” said Brandon Moffatt, co-founder of StormFisher Hydrogen, a London-based company that produces carbon-free gas. , including hydrogen.
Moffatt said many determining factors in this deal need to be determined, including pricing and our ability to get product out of the country and across the Atlantic.
In other news:
● Spun off from a lab at the University of Toronto in 2006, Vive Crop Protection was awarded $34 million in a Series C investment round. The company, which developed technology that enables the precise delivery of insecticide and fungicide, will use the funds to roll out its products in new North American markets as well as for R&D.
● An all-in-one business management solution for fitness and wellness operators, WellnessLiving has deeper pockets after securing $86 million. With financial investment from McCarthy Capital and CIBC Innovation Banking, the company will use the new funds for international expansion and product development.
● Emerging 3D printing company Metafold 3D caught the eye of Active Impact Investments, a Vancouver-based cleantech investor. The company has attracted $500,000 in pre-seed funding. Metafold plans to use the capital to grow its team, grow its platform and support its beta launch.
● The Canadian artificial intelligence (AI) cluster Scale AI is investing $17.2 million in 12 projects dedicated to expanding the adoption of AI in supply chains. D-Wave Systems, Mimik, Moov AI, Coveo and Canada Drives are just a few of the companies that will receive funding.
Amanda Whalen writes about technology for MaRS. Torstar, the parent company of the Toronto Star, has partnered with MaRS to shine a light on innovation in Canadian business.
Disclaimer This content has been produced in partnership and therefore may not meet the standards of impartial or independent journalism.