2022 HardTech conference highlights supply chain issues and need for government support in the semiconductor industry

Markham-based tech hub VentureLAB hosted its second annual HardTech summit, bringing together tech leaders to highlight hardware and semiconductor innovation in Canada.

Phil Vokins, director, channels, alliances, and cloud at Intel, kicked off the discussion by underlining the supply chain issues impacting chip manufacturing following the lockdowns in China, the Ukraine-Russia conflict, and rising geopolitical tensions elsewhere.

He added that semiconductor is not a self-contained industry: “It’s not just about the fully packaged chipset, it’s right down to the very components of the semiconductor, where we need this whole new ecosystem.”

Gem Shoute, chief executive officer (CEO) of Zinite, a Vancouver-based semiconductor startup, explained how startups in this industry are particularly affected by supply chain disruptions. In addition to delays in obtaining raw materials or test equipment, startups also face more barriers in entering the market and dealing with the biggest gatekeepers of the industry, which are tool vendors and R&D (research and development) fabrication plants (fabs). The disruptions between supply chain and the innovation pipeline hinder the development of new technology, Shoute explained.

Fellow panelist and CEO of semiconductor startup Blumind, Niraj Mathur, acknowledged that the semiconductor industry is not a “monolith”; “there’s a lot of different types of products, a big variety of products, a big variety of technologies, a big variety of processes that operate in this industry altogether”. 

The semiconductor industry is also cyclical, albeit unpredictable, Mathur added. “If you look at the chart of the industry over the last 30 years, you’ll see this roller coaster curve, which is very characteristic of our industry. And that’s just how things are. The reason for this is two things; inventory issues, and there’s always this tendency to overcorrect when people see changes happening. And the world economy that has a direct impact on the demand for these goods. So there is a lag in the correction for adapting to new demand dynamics,” Mathur explained.

While Vokins deplored the unpredictability of health crises and global conflicts affecting supply chain, Shoute observed that Covid-19 or natural disasters are no longer black swan events. “We’re seeing more of these new events. Is our supply chain ready to tolerate these disruptions that might happen more often? Do we as a nation want to make that bet?” said Shoute.

Regardless, the dependence on Asia-Pacific for semiconductors is a problem, the panelists agreed. “Sixty per cent  of all chips the world consumes are made on a tiny island of Taiwan in Asia. And up to 90 per cent of the more advanced chips are built in Taiwan. That is a huge weakness and, should anything happen to the global supply chain, that throws the whole world economy into jeopardy.”

Government support is key for Canada to become a critical node in the global semiconductor supply chain, Vokins said. “If we want to stimulate chip, or semiconductor silicon manufacturing processes in any given country in the world, do remember, the organizations who have the muscle and the ability to do that are also commercial entities. And it is important that they have government support to even start that conversation.”

The government should be willing to help in this multi-level problem, instead of putting a hard cap on investment and hence handicapping Canada in a game that is already unfair and restricting the value that the semiconductor sector can generate, Shoute said.

“The semiconductor industry creates $7 trillion in economic activity, and every job in it creates another five to six jobs in other parts of the economy,” Vokins affirmed, quoting a report from SIA (the Semiconductor Industry Association).

Canada has the perfect environment, climate and geography, and abundant space and talent to foster innovation and massively influence the global semiconductor industry, Vokins concluded. 

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Jim Love, Chief Content Officer, IT World Canada

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Ashee Pamma
Ashee Pamma
Ashee is a writer for ITWC. She completed her degree in Communication and Media Studies at Carleton University in Ottawa. She hopes to become a columnist after further studies in Journalism. You can email her at [email protected]

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