The conference, organized by PRIMA Quebec, highlighted evolution and growth of microelectronics and photonics sectors in Quebec, and touched upon strategic importance of minerals, materials, and components within value and supply chains.
A study initiated by PRIMA Québec, in collaboration with ISED Canada, MEIE, MRNF, Technum Québec, ISEQ and Optonique was carried out by SIA and Yole Group. Sia is a next-generation, global management consulting group, founded in 1999. The study will be available on the Prima Quebec website.
Catherine Kallas, Senior Consultant, Energy, Industry, and Transport, SIA Partners, and one of the four presenters, shared the key findings. The others were: Myrielle Robitaille, MD, SIA, Mathieu Demoulin, Senior Supervising Consultant, SIA, and Aymen Ghorbel, Senior Analyst, Yole Group.
The purpose of this study is to help position and develop Quebec’s microelectronic and photonic industries, along with the mineral, material, and component industries that lie upstream and midstream of their value and supply chains to ensure the competitiveness of strategic industries — energy, defense, aerospace, electric vehicles, life sciences, etc. Within these sectors, the analysis revealed several distinctive niches in which Quebec could establish leadership.
A new partnership was established among PRIMA Quebec, Innovation, Science and Economic Development Canada (ISED), The ministère del ’Économie, del ’Innovation et del ’Énergie(MEIE), The ministère des Ressources naturelles et des Forêts (MRNF), The Technum Québec innovation zone, The pole d’excellence del’ industrie des systems électroniques du Québec (ISEQ), and The pôle d’excellence Optonique. The SIA /Yole Group was mandated to conduct the study.
The approach was designed in collaboration with the ecosystem. Targeted interviews helped clarify certain segments, while validating Quebec’s contextual specificities. A Steering Committee was consulted throughout the study to help guide methodological choices, while ensuring their strategic alignment. Several stakeholders from the ecosystem were notified of the ongoing analyses to help disseminate the findings. The Steering Committee consists of several members.
The project aims to enhance and advance Quebec’s microelectronics and photonic industries. We have zoomed into 13 segments and Quebec’s positioning. We have drafted seven themes of interest. There is the Steering Committee for the ecosystem mobilization. We have gathered 44 trends that are across nine categories. 12 most important trends were presented.
Trends and analysis
In the geopolitical side, the economic war between USA and China impacts the entire supply chain, as minerals, machine, and chip producers are selling fewer products. According to the 2024 U.S. Geological Survey (USGS), a 30 percent gallium supply disruption would cause an economic deficit equal to CAD$823 billion. International value chains make this all very risky.
From technological perspective, superconductor (SC) industry invests approximately 20 percent of annual revenues in R&D. In USA, by comparison, only pharma industry invests more than 20 percent of revenues in R&D. SC sector surpasses that of software, telecom, etc. We are in an innovation race that needs massive R&D investments.
Resources include water, mineral, energy, and human. Manufacturing processes require large quantities of very pure water. TSMC must regularly limit its production due to drought. As per SIA, approximately 1.4 million jobs will also need to be filled by 2030, including over 1 million in computing, approximately, 300,000 in engineering, and 100,000 in technical positions. These manufacturing industries consume great deal of energy and mineral resources.
Environmental has local production, bio-based components, recycling, etc. Due to considerable exposure to climate changes, companies are forced to reduce production during major climate events (e.g., winter storms in Texas, droughts in Taiwan, etc. Significant efforts are being made to reduce environmental footprint associated with these sectors — recycling, eco-design, bio-based materials, etc.).
Next, CSM export restrictions, with concrete impacts already observed. In Aug. 2023, China imposed export restrictions on gallium and germanium. 98 percent of refined gallium production comes from China, along with 68 percent of germanium. Five new critical minerals became subject to export controls from China in early 2025 — tungsten, tellurium, bismuth, indium, and molybdenum.
Quebec already mines or processes several CSMs used in microelectronics and photonics, such as indium (refining only), niobium, palladium, etc. Some pilot projects could help increase Quebec’s potential. One example would include gallium recovery project that is currently underway at Rio Tinto’s Vaudreuil alumina plant. Also, Quebec’s CSMs are used for key products in these sectors.
Tensions are emerging in the equipment manufacturing sector. USA, with support from the EU, Japan and other major stakeholders, reinforced export restrictions for advanced chip manufacturing equipment in 2023, which directly impacted Chinese companies like Huawei and SMIC. For example, Japan restricted export of 23 types of semiconductor production machines to China that year.
Finally, components used in defense and military applications are facing growing tensions. The International Traffic in Arms Regulations (ITAR) imposed restrictions on the export of defense-related technologies, including certain semiconductors and manufacturing equipment. This limits international trade with countries considered “U.S. national security risks.” Exacerbated by ITAR and its complex compliance framework, these geopolitical tensions are forcing certain countries to develop “ITAR-free” alternatives to reduce their dependence.
