Canada’s Semiconductor Strategy: Are We Mistaking “Not Winning Everywhere” for “Not Competing at All”?

When Canada’s Minister of Artificial Intelligence and Digital Innovation, Evan Solomon, recently suggested that Canada would not pursue a national semiconductor strategy because we “can’t win at everything,” it revealed something far deeper than a policy preference. It revealed some mixed messaging.

At a time when every major economic power is racing to secure the infrastructure of the future economy, Canada appears prepared to step back from one of the most strategically important industries globally and simply hope that market forces will sort things out. That doesn’t feel like a resilient strategy, but more apathy disguised as pragmatism.

Where Canada Is Now: The Compute Gap

Semiconductors are the foundational infrastructure of the modern economy. They power everything from AI and telecommunications to defence technologies and energy systems. While our peers in the G7 are investing tens of billions of dollars to secure their technological sovereignty through legislation such as the American CHIPS and Science Act and the EU Chips Act, Canada remains the only country in this group of advanced democracies without a standalone strategy.

The government often treats a collection of programs as if they add up to a strategy. They do not. What Canada currently has is a series of disconnected initiatives operating without a coherent national framework tying them together.

Why Canada’s Semiconductor Strategy Matters for Economic Sovereignty

The recent decision to spin off the Canadian Photonics Fabrication Centre (CPFC) into a commercial entity is a perfect example. While the move may improve agility and attract private investment, it also highlights how reactive our approach has become. We are restructuring strategic national assets without the systems, metrics, or industrial strategy required to ensure the resulting innovation actually strengthens Canada’s long-term economic position.

The irony is that Canada has a rich, world-class history in this space. We aren’t starting from scratch. In fact, to me, it feels like we are abandoning a legacy. Denying this history, or worse, pretending we lack the DNA to compete, only compounds the failure.

The Challenges: A Contradiction in Sovereignty

The decision to forgo a chip strategy directly undermines the hard work of existing government departments who have been charting a productive course in this Space. One example is the Department of National Defence’s (DND) Defence Industrial Strategy (DIS). The DIS explicitly calls for “Securing Supply Chains for Key Inputs” such as semiconductors and prioritizes a “Build-Partner-Buy” framework to ensure Canadian sovereign control.

In this case, how can we “Build” or even “Partner” effectively when all our modern defence systems and platforms rely on semiconductors for their performance?

How Canada Can Compete in the Global Semiconductor Ecosystem

Canada does not need to become another Taiwan to succeed in semiconductors. That framing misses the point entirely.

We already possess many of the foundational assets required to play a meaningful role in the future semiconductor economy: globally respected AI research, emerging semiconductor and photonics ecosystems, trusted geopolitical positioning, and access to the critical minerals required for advanced manufacturing.

Other middle powers, including Singapore, India, and Vietnam, understood that success did not require dominating the entire supply chain. Instead, they identified strategic roles within the ecosystems of larger global players and built coordinated national strategies around those opportunities. They created clarity, alignment, and long-term signals to capital markets.

Canada has yet to do the same. In fact, the Minister muddied the waters. 

Building Investor Confidence Through a National Semiconductor Strategy

The recommendations coming from Canada’s Semiconductor Council (CSC) offer a strong starting point, but what remains missing is the “gravity” that only a cohesive national strategy can provide. Without that gravity, our assets remain fragmented, private investment remains hesitant, and promising innovation ecosystems struggle to achieve the scale and coordination needed to become globally competitive.

Capital does not simply follow talent or research excellence. It follows confidence, alignment, and long-term national commitment. Right now, Canada is signalling potential, but not conviction.

Calls-to-Action for Key Stakeholders

To ensure Canada is a leader in the next industrial revolution, I would encourage some key actions for the Federal government and its departments:

• Federal Government: Implement a national strategy and integrate semiconductor manufacturing as a “Key Sovereign Capability” within the Defence Investment Agency’s new framework.
• Minister of AI and Digital Innovation: Ensure that the CPFC spin-off includes strict mandates for Canadian IP ownership and priority for the domestic supply chain.
• To the Department of National Defence: Explicitly include semiconductors as a priority sector under the BOREALIS innovation mechanism to fast-track domestic defence applications.
  
  

The global market is not waiting for us to catch up. Capital and talent follow ambition and clarity. When a government signals that a strategic industry is effectively “unwinnable,” investment moves elsewhere. The window is narrowing, and the question remains: Does Canada intend to participate in shaping the future, or merely import it from somewhere else?