Canada can benefit by partnering with Taiwan's tech titans: Report

Canada can benefit by partnering with Taiwan's tech titans by boosting its semiconductor industry, according to a recently released report.

Canadian policy think tank the MacDonald Laurier Institute has released a report exploring how Canada could better build on trade ties with Taiwan to spur the development of its home-grown ICT industry, reported Taiwan News.

The in-depth report prepared by Taiwan tech analyst Matthew Fulco said that by backing Taiwan's Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) bid, Ottawa could help remove barriers between countries' tech industries.

The CPTPP membership would lower tariff barriers between the countries and enable Ottawa to better partner with Taiwanese tech companies.

The two countries should also push forward with the Foreign Investment Promotion and Protection Arrangement (FIPA) the two sides are currently negotiating, added the report.

CPTPP is a major free-trade bloc made up of 11 nations including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam with the objective of supporting sustainable and inclusive economic development. It was launched on December 30, 2018.

Fulco pointing to the recent economic pain the auto chip shortage has brought to the Canadian auto industry, with vehicle production dropping to its lowest point in four decades said in his report that building stronger partnerships between Taiwanese suppliers and Canadian automakers would better guard against further disruptions going forward, reported Taiwan News.

"For Canada, the automotive chip shortage has been especially painful given... the auto sector is one of the largest of Canada's manufacturing industries," he said, adding, "The ongoing automotive chip shortage shows how a stable semiconductor supply is crucial for Canada's economic well-being."

Meanwhile, the Taiwan Semiconductor Manufacturing Company (TSMC) announced it will increase the supply of automotive microcontroller units (MCUs) by 60 per cent in 2022 to alleviate the squeeze.

Though Canada has been slower in moving toward supply chain onshoring than other Western countries, Fulco said that Ottawa could kick start its localization efforts by first tapping into its great natural abundance of rare earth elements (REE), which are crucial for manufacturing ICT products.

Since China still dominates the global REE ecosystem and has a history of weaponizing its grip on the elements, an alternative Canadian supply chain would have geopolitical significance, reported Taiwan News.

"As a trusted partner of the US, Taiwan, Japan and other key semiconductor-producing nations, Canada has an opportunity to be at the forefront of a new, secure supply chain," he wrote.

The country is already building its first processing plant in Saskatoon, along with a new REE mine in Nechalacho. Fulco recommended Canada continue this momentum by extending its manufacturing capacity further downstream through partnerships with TSMC.

"Given its dominance in the foundry segment, TSMC could potentially play a large role in helping Canada develop its semiconductor manufacturing capability," he added, reported Taiwan News.

( With inputs from ANI )