The resilience and capacity of the global semiconductor supply chain is under scrutiny as major disruptions to key industries worldwide continue to be observed from the ripple effects of the pandemic, geopolitical tensions, and climate change.
In every aspect of modern life, semiconductors are omnipresent. It would be a challenge to find a product, service, or process that does not leverage a semiconductor chip somewhere within its value chain; from design systems to assembly lines, transport, point of sale, or a device or product itself, semiconductors are ingrained in our daily lives.
It is not surprising then, that when the pandemic hit and the demand for electronics skyrocketed while simultaneously causing widescale disruptions to the semiconductor supply chain, the effects rippled across vital industries worldwide. And that this inevitably spurred leaders into action. In North America, the solution became clear: nearshore semiconductor manufacturing. The US and Canada have both made their intentions clear with the announcement of the CHIPS and Science Act, and the release of the Roadmap to 2050: Canada’s Semiconductor Action Plan, with both countries aiming to grow their semiconductor industries - and fast.
THE USA IS BOOMING WITH STRONG DESIGN CAPABILITIES AND BOOSTED MANUFACURING
The US is home to some of the world’s largest semiconductor players including Intel and Texas Instruments, with a strong presence in the upstream value chain including in electronic design automation (EDA), core IP, and chip design. The gap – and resulting opportunity – remains in manufacturing, as fabrication is heavily outsourced to the eastern nations of Taiwan, South Korea, and Japan. US policymakers are increasingly interested in closing the gap by attracting semiconductor investments for both production and innovation, and have, through the CHIPS and Science Act allocated USD 278 billion to scientific research, development, and demonstration (RD&D), direct manufacturing incentives, and investment tax credits to strengthen the domestic industry.
In recent years, there have been major greenfield investments and facility expansions in both front-end and back-end manufacturing, signaling a new wave of commercial opportunities. This is reflected in the number of investments channeled into the sector; over USD 210 billion since 2020 has been committed to US-based semiconductor projects, including the construction or expansion of fabs across the country. Within this cohort of projects are a long tail of smaller investments that present optimal market footholds for Swedish firms.
CANADA IS ON THE RISE, DESIGNING SEMICONDUCTORS FOR TOMORROW, TODAY
Canada’s outstanding R&D infrastructure and talent network has long produced industry leading semiconductor companies, many of which are later acquired and scaled by global giants, notably, Nortel, Teledyne Dalsa, Gennum Corporation and more recently, GaN Systems.
Attracted by the nation’s cutting-edge technological innovations in AI, quantum computing, sensors, and photonics, a new wave of growth in semiconductor start-ups and investments is coming to Canada, driving R&D towards future application in areas such as electric and autonomous vehicles. Canada’s existing strengths lie primarily in design, complemented by an expertise in advanced packaging and specialty fabrication. Among the various objectives set out in the Roadmap to 2050, Canada outlines an intention to develop and scale innovations that disrupt the traditional fabrication processes, reducing costs and increasing sustainability across the manufacturing value chain.
NORTH AMERICA’S RENEWED INVESTMENTS IN SEMICONDUCTORS AN OPPORTUNITY FOR SWEDISH COMPANIES
As neighbours and trading partners, Canada and the US are collaborating to strengthen the North American semiconductor supply chain. The two countries recently developed the Canada-US Working Group on Supply Chains and have invested in several joint initiatives including the IBM cross-border semiconductor packaging corridor.
Both nations have indicated that international investment into the North American semiconductor value chain, alongside the scaling of domestic activities, is a priority to facilitate continued growth.
For Swedish companies across the value chain, the semiconductor market in North America is ripe with opportunities for collaboration and any strategy should consider how to:
- Leverage the strong R&D and design capabilities represented in North America, through collaboration with domestic public or private sector actors that are pioneering innovations within the semiconductor industry and offering incentives to interested parties. With existing expertise in design, IP, and cutting-edge areas of research, Swedish firms can benefit from collaboration with research institutions and private organisations, sharing knowledge, and advancing the development of the latest chip technology and specialised fab processes together.
- Fill the current gaps in manufacturing within the North American semiconductor market, exploring opportunities to invest in the construction or expansion of semiconductor fabs. Swedish firms can take advantage of favourable investment conditions and manufacturing landscape in North America, capitalising on the growing momentum in large-scale semiconductor manufacturing in the US and market specialised fabrication in Canada.
With large-scale investment, a dynamic and innovative R&D approach, and an openness to international collaborations, now is the time to explore the North American semiconductor industries.
Our industry leads across the USA and Canada can provide tailored, expert support to help your company identify and collaborate with local partners and actors across the entire semiconductor value chain.
Contact us today to start your growth journey in North America’s world-leading semiconductor hub.