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ottawacitizen.com
Friday 10 July 1998
No chips off the old block
Ottawa won't get chip plant: executive
Michael Lewis
The Ottawa Citizen
The Ottawa region's dream of landing a world-scale semiconductor plant --
a multibillion-dollar project that would create more than 1,000 jobs -- is
hollow, says a leading industry executive.
Canada lacks the "critical mass" of technologies, people and resources
needed to launch a major computer-chip manufacturing plant, said Sean
Maloney, the vice-president and co-director of the sales and marketing
group for Intel Corp. "You have some of the needed infrastructure," but not
all, said Mr. Maloney.
He was speaking after a keynote address at a Comdex computer show in
Toronto's Metro Convention Centre.
Industry Canada has been lobbying hard to land a chip fabrication plant for
Canada, the only industrialized nation that doesn't already have one.
"I am committed to making sure that Canada is not overlooked," federal
Industry Minister John Manley said last year. "We're going to win one."
Mr. Manley has travelled to Asia to woo the giant companies that could
build fabrication plants in Canada.
His preferred location for such a development is said to be the Ottawa area.
Last year, the region sent "Team Ottawa" -- a group of local politicians and
development officials -- on a tour of Japan, Korea and Taiwan to sell the
semiconductor idea.
The most recent pilgrim on the semiconductor trail was Brian Barge,
president of the Ottawa Economic Development Corp., who recently
returned from a 13-day, five-country tour of Asia. Mr. Barge says the
Ottawa region's semiconductor is alive and well -- although it may be
temporarily delayed as Asia grapples with its economic problems.
But critics of the campaign say the country doesn't have enough workers
trained in the highly esoteric processes used to mass-produce computer
memory chips. They say Canada would need to import the specialized
stamping equipment and other machinery used in chip production, likely
from U.S. states such as Virginia, where the industry is well established.
Skeptics such as Danny Lam, an American consultant who helps
semiconductor manufacturers around the world evaluate sites for their
chip-making plants, say Canada is so far behind other areas of the world --
such as Southeast Asia, the U.S. and Europe -- that it may never catch up.
There's a profusion of fab-plants -- which manufacture the miniaturized,
wafer-thin memory chips that power computers -- in countries such as
Taiwan and South Korea, where labour costs are low compared with those
in Canada.
Over the past two decades, Intel has made huge investments in chip plants
in the Asia-Pacific region and elsewhere, Mr. Maloney said.
However, he said the microchip manufacturer, based in Santa Clara,
California, has no plans to build a chip plant in Canada. Nor is such a
project likely in the near future. The cost of building such a plant starts at
about $2 billion U.S., and Intel recently announced austerity measures,
including job cuts in its operations worldwide.
Nevertheless, Mr. Manley has told the Citizen that Canada remains a
serious contender for fab-plant investment, adding that the economic and
currency crisis in the Asia-Pacific region is buying the country time to
fine-tune its proposals to lure investors.
While the Ottawa region boasts a number of firms involved in chip plant
design and manufacturing on a comparatively small scale, along with a large
pool of well-trained and talented technology workers, the goal of attracting
a major chip plant has proved elusive.
But Mr. Manley remains undaunted, spurred by the prospect of the billions
that would be pumped into the economy by such a project through job
creation and spinoff effects.
Mr. Lam has said that having a chip plant would put Ottawa's Silicon Valley
North in the big leagues of the technology industry.
The Comdex trade show, the largest in Canada with more than 300
exhibitors and 60,000 attendees, wraps up today. |
