Canada to privatize photonics centre for chip foundry

Canada's federal government has announced the privatisation and expansion of the Canadian Photonics Fabrication Centre in Kanata North, a move intended to add domestic fabrication capacity to the country's semiconductor sector.

Under a plan outlined by Industry Minister Mélanie Joly, the National Research Council-led facility is to transition into a commercial III-V compound semiconductor foundry. Supporters say the change would address a gap in Canada's semiconductor chain by enabling advanced chips to be made domestically rather than overseas.

The announcement was welcomed by the Kanata North Business Association, which represents more than 800 companies in the Ottawa technology cluster. According to the group, the decision follows a multi-year push by industry participants to move the centre to a commercial footing and expand its manufacturing role.

Ottawa's semiconductor and photonics base already carries significant economic weight. A study cited by the association found that semiconductor and integrated photonics companies in the capital region generated CAD $12.65 billion in national output in 2024 and supported more than 48,000 jobs.

The broader Kanata North technology park generated CAD $17.9 billion in economic output and supported about 63,300 jobs, according to the latest economic impact report cited by the association. It added that semiconductor activity in Kanata North is more than 12 times the national average.

Industry push

The association said it worked with Invest Ottawa and industry companies to build support for the centre's transition. That included convening executives, aligning priorities, helping develop a business case and engaging government stakeholders.

Kelly Daize said the effort was driven by demand from companies in the sector.

"We take our lead from industry. Once the need to transition the CPFC to a commercial model was clearly articulated, we mobilized with industry, convened key stakeholders, supported the development of the business case, and demonstrated that Ottawa has all of the elements that make it the natural home for a globally competitive compound semiconductor foundry," said Kelly Daize, Executive Director, Kanata North Business Association.

Supporters view the centre as a strategic asset because compound semiconductors are used in photonics, communications and other specialised applications. Expanding that capacity in Canada would allow more of the design, prototyping and production process to remain in the country.

From minerals to manufacturing

Project advocates argue that Canada already has many of the elements needed for a full semiconductor value chain, including access to critical minerals, research strengths and established chip design expertise. What is missing, they argue, is fabrication at sufficient scale.

"Canada has the full stack, from critical minerals to photonics to AI systems. We're one of the few countries that can go from ground to chip. Ottawa is among the few global locations with the infrastructure, technical expertise, and skilled workforce to support the CPFC as it transitions to a new commercial entity," said Andy Thompson, Site Lead for Canada, Nokia, and Chair of the KNBA Board of Directors.

That view is shared by companies that already use the centre. Ranovus, an Ottawa-area photonic semiconductor company, said it has worked with the fabrication centre for more than 14 years as an anchor customer.

"Ranovus, as the largest and fastest-growing Canadian-owned AI photonic semiconductor company, has been a proud anchor customer of the Canadian Photonics Fabrication Centre (CPFC) for over 14 years. Together, we have co-developed multiple generations of AI-optimized laser technologies and, with support from ISED, built a strong ecosystem of design, fabrication, and advanced packaging partners in the Ottawa-Kanata region. This foundation has helped unlock the potential of this strategic Canadian asset. We welcome the federal government's step to establish a well-funded, globally competitive foundry that can match the world's best in scale, innovation, and quality," said Hamid Arabzadeh, Chairman and CEO, Ranovus.

Commercial access

Another issue for the sector is whether Canadian companies can secure reliable and affordable access to fabrication processes as they move from research to market. CMC Microsystems said the centre could help bridge that gap by supporting prototyping and commercialisation.

"Canada has long been a leader in semiconductor design and research, but access to advanced fabrication like the CPFC is key to turning innovation into commercial success. Through collaboration with the CPFC to develop accessible process technologies, we can enable cost-effective prototyping, accelerate commercialization, and strengthen Canada's semiconductor ecosystem," said Gord Harling, President and CEO, CMC Microsystems.

The government's decision also reflects broader concern in many countries over semiconductor supply chains, particularly for technologies linked to communications, artificial intelligence and defence-related infrastructure. For Canada, local industry groups argue that keeping more fabrication at home could help retain intellectual property, manufacturing jobs and a larger share of the value created by domestic research.

The fabrication centre's planned expansion places Kanata North at the centre of that ambition. Backers argue the Ottawa region now has the design base, technical workforce and industrial support needed to host a larger commercial foundry.