They also tell compelling stories. The Canadian microelectronics industry is a homegrown phenomenon. Established companies have followed the arc of business growth from start-up to global business within a generation. They demonstrate that Canada really does have the know how to build strong knowledge-based businesses in some very tough marketplaces. Things are not easy in microelectronics. Costs of production are sky-rocketing. Competition is fierce and business models are fragmenting. It doesn't take too long at the Forum for someone to muse out loud "We must be crazy to be in this business." Inevitably, hard questions are asked about the future of specific business models and of the industry itself.

In early 2006, the Ontario Government began a round of consultations specifically on the future of microelectronics. This lead ITAC to produce a study outlining the views of the leaders of the microelectronics industry in Ontario and to collect their recommendations about what is needed to ensure a robust future. We will be releasing this study early in the new year. In essence, the study makes a number of recommendations of ways the industry, alone or in partnership with Government, can forge new paths. David Lynch details one suggestion about a Centre of Excellence in microelectronics in graphics and video that would be located in the GTA. The industry leaders who contributed to the study also believe that the Provincial Government can assist in the formation of new areas of microelectronics expertise. For example, given the size and importance of the automobile industry in Ontario and the modern automobile's appetite for microelectronics, stronger collaboration between these two sectors should lead to interesting innovation and economic activity. Another recommendation suggests that the Provincial Government as a leading player in health care delivery might sponsor closer collaboration between microelectronics and health. We will share our recommendations with theProvince and the report will likely provide the foundation for ongoing consultations. The microelectronics industry is a great asset for Ontario and for Canada. It provides a rich pool of knowledge about the formation of knowledge based economic activity in addition to the wealth and employment it generates. In the meantime we're already planning our next microelectronics forum.

Meet Colin Harris

Colin Harris, Vice-President Worldwide Operations for PMC-Sierra, talks about PMC-Sierra in 2007, the realities of the Canadian Microelectronics sector, and how Government and business can work together.

This past year wasn't exactly a quiet one for PMC-Sierra, talk about some of the successes in terms of revenue, technological developments, growth and overall successes.

Our diversification strategy to expand the company’s focus from its core telecom market into the network edge and enterprise storage markets has been successful. Currently, approximately half of the company’s total revenue comes from these markets. PMC-Sierra had a strong year in 2007, growing revenue and earnings throughout the year. Our revenue for the first three quarters of 2007 was $325 million, as compared to the $291 million we recorded for all of 2005.

PMC-Sierra introduced several major new technologies and products this year. In the storage area we developed and sampled the industry's first 6Gbit/s SAS RAID-on-Chip Controller which opens up new markets for our technology as well as a Quad 8Gbit/s Fibre Channel Controller which keeps our lead in the Fibre Channel market. We also launched our first solution for the emerging WiMAX market, a WiMAX MIMO RF device that is currently being designed in at several major OEMs.

Microelectronics companies are facing spiraling costs and stiff global competition. It's a tough business. In your opinion, what key elements would make the "ideal" Microelectronics/semiconductor environment? (i.e. Government funding, ideal tax structure, cooperation between companies)

Many countries see the microelectronics industry as strategic and encourage companies to set up design or operations centers with tax incentives, infrastructure support or advanced education programs. In Canada, we have the SR&ED program which helps keep our research and development competitive. PMC-Sierra supports the proposed changes to the SR&ED program as outlined in the recent ITAC brief to the Canadian Government. PMC-Sierra cooperates with our peers through ITAC and the Global Semiconductor Association (GSA.)

What are some of the tough realities for the larger microelectronics companies such as PMC-Sierra that Canadian companies operating in this arena are going to have to face in order to be successful?

PMC-Sierra realized very quickly in order to be successful we had to be global. Our revenue base has always been diversified by geography with no single region of the world dominating our sales.

As we grew, we realized our customers wanted to engage us in their language and in their time zones. As a result, we expanded our office in Shanghai, which now has almost 100 engineers who provide technical assistance and develop software for local and international customers. We have also diversified our labour force to include teams in Israel and India. The Israeli team contributes key expertise for our Passive Optical Networking (PON) devices while our India team provides very knowledgeable workers who enable cost-effective chip execution.
We started as a fabless chip company utilizing Asian foundries at a time when that model was not well accepted. Now, companies accept it as the best manufacturing model. I believe that the globalization of knowledge work is the next phase in the evolution of business. In Canada, we need the education, savvy and Government support to make this work.

Is there anything particular in the British Columbia ecosystem in which you operate that helps to foster your success? Is it the BC Government a strong champion for the industry?

Although we are a US company, having a large operation in Vancouver gives PMC-Sierra a unique advantage in that we have access to a highly educated pool of local and Canadian talent while being just a short plane flight from Santa Clara, which is still the hub of the microelectronic world. The BC Government, through the BC Innovation Council and the Premiers Technology Council has been instrumental in keeping innovation at the forefront of the provincial agenda.


How the Cluster Can Work For Canadian Microelectronics Firms

BY DAVID LYNCH

The theme for the 13th Annual Executive Forum on Microelectronics was “The Power of Community: Building Clusters in Canada.” We shared perspectives from established microelectronics clusters such as Austin and California as well as emerging clusters in India and in Edmonton.

Cluster-building investments clearly pay off. The best example in our industry is the huge play that Taiwan made in the eighties to become the leader in semiconductor fabrication. Taiwan invested appropriately and has dominated this space ever since. And in Canada we witnessed the formation of a strong microelectronics cluster in telecom anchored by Nortel in the 1990s.

I believe that we have real potential for the formation of a strong video and graphics hub in microelectronics in the Greater Toronto Area. There are already a number of companies operating in this space. They include AMD, Christie Digital, Dalsa, Evertz, Harris, Genesis Pixelworks, my own company, Gennum, as well as emerging players like Fresco, VIXS and Silicon Optix. They form their own value chains around key areas of production such as studio broadcast equipment, digital cameras and video processing. And virtually all have a position in the burgeoning marketplace in digital TV. They all also benefit from proximity to the Canadian broadcast industry centred in Toronto.

All the elements are in place for a strong cluster including the availability of a good talent pool thanks to productive relationships many of us have made in the University community. What is required now is some industry focus around this possibility. The Ontario Government has indicated a keen willingness to aid in the next generation of microelectronics industry. One of ITAC’s recommendations to the Provincial Government proposes “centre of excellence” support for the idea of a video and graphics cluster for the GTA. We will be working closely with the Province on this and other recommendations in our report on the Ontario microelectronics industry.

ITAC NEWS

The Honourable Doug Horner, Minister of Advanced Education and Technology, Alberta, Speaks at ITAC Event

On December 11, The Honourable Doug Horner, Minister of Advanced Education and Technology, Alberta, addressed the group of ICT leaders at ITAC’s quarterly Board of Governors Meeting. Minister Horner shared his vision of Alberta’s high-tech future and how his Province is building the “next generation economy.”

The goal, said Minister Horner, is the “growth and development of the IT industry here and around the world.” Recognizing Alberta’s current success within the natural resources industry, he says “ICT has the potential to become Alberta’s next success story.” Click here to see the full text of Minister Horners speech.

Ron McKerlie CCIO & Team Outline Government of Ontario Priorities at ITAC's CCIO Roundtable Breakfast

Over 350 people gathered at the ITAC Roundtable Breakfast with Ron McKerlie, Corporate Chief Information Officer (CCIO) and Chief Strategist, Service Delivery, Government of Ontario. McKerlie and his team of five Ontario CCIO's gave an overview of their areas of service outlined priorities for today, priorities over the next year, upcoming RFP's, upcoming RFS, challenges and opportunities.

"It's a very efficient use of our time," says McKerlie of ITAC's breakfast events, "It benefits the Government in a couple of ways. First of all it's really difficult to get one-on-one time with 350 vendors to (spread) our message and our story — to get that story out there consistently would be almost impossible."

"From the vendors' point of view, it gives them exposure to the senior management team … in one short period of time they can get access to the senior leaders and the Government I & IT organization," said McKerlie. To download the presentations from this event, click here.

(IT)’s all About Partnership – ITAC Public Sector Business Committee

The Federal Government’s message at the Nov. 27 meeting of ITAC’s Public Sector Business Committee was that “it’s all about partnership.” Jirka Danek, Director General Product Management, Public Works and Government Services Canada (PWGSC) outlined the scope of IT infrastructure in the Government of Canada. The overriding themes in his presentation were efficiency and partnership. He acknowledged IT is big business in the Government — pervasive and critical to the operation of the Government of Canada. He says our current model is not sustainable; some of the areas of concern are not fully leveraging the industry, an aging IT infrastructure which is not “green,” and an aging workforce — which is an issue in all sectors.

Jerome Thauvette of PWGSC updated the group on the Terms and Licensing Agreement issue, which has been resolved, 9601- 4 and the procurement transformation project. Dan Duguay, PWGSC expressed Minister Fortier’s interest in getting in to the field to meet with suppliers, and stressed the Governments’ interest in “fair, open and transparent procurement.” Jeff Braybrook, Treasury Board Secretariat, gave an overview of some of the Web 2.0 technologies the Government is moving towards and the shift from a publishing environment to a participation environment. He said the Government is interested in “green” IT — recycling initiatives, power-management strategies and virtualized work environments.

The Public Sector Business Committee consists of senior corporate business leaders from ITAC's membership whose companies focus on sales to Government. The committee meets six to eight times a year to monitor, assess and advise on procurement policies and practices. Government officials are regular participants of the meetings and are given time to report at each meeting on progress made on IT procurement initiatives. For more information contact Linda Oliver at (613) 238 – 4822 x 222 or E-mail at: loliver@itac.ca.

ITAC's Recommendations for SR&ED Reform

As the leading R&D investing sector in the economy, ICT has a tremendous stake in the SR&ED incentive program. The Federal Government is currently reviewing SR&ED with an aim to improving it. ITAC's recommendations on how to do so can be found here.

ITAC IT Hero Award Winner Kayla Cornale Honoured by CNN

Last year's ITAC IT Hero award winner, Kayla Cornale, was honoured by CNN at "CNN Heroes: An All-Star Tribute,” on December 6 at the American Museum of Natural History in New York. Inspired by challenges faced by her ten year-old relative, Kayla Cornale created a music-based teaching system called Sounds into Syllables. By linking the musical components of pitch and harmony, this system helps autistic children learn to read, spell, classify words and correctly identify facial expressions for a series of emotions.

ITAC EVENTS

ITAC and Natural Resources Canada to Hold Executive Roundtable on Energy Efficient Data Centres
Thursday, January 24, 2008, 9:00 a.m. - 1:00 p.m.
Fairmont Chateau Laurier Hotel, 1 Rideau St., Ottawa, ON

This event showcases best practices for reducing power consumption, reducing environmental impacts, and advancing effective public policies. The Information Technology Association of Canada (ITAC), with the participation of Natural Resources Canada, will host an executive roundtable on Thursday, January 24, 2008 from 9:00 a.m. to 1:00 p.m. at the Fairmont Chateau Laurier in Ottawa, Ontario to highlight the issue of energy efficient data centres. For more information, click here.


OTHER NEWS AND EVENTS

Rogers TV- Healthcare for an Aging Population Peer-to-Peer Roundtable
Tuesday, January 08, 2008, 7:30 a.m. to 10:30 a.m.
Rogers Communications Inc., Velma Rogers Theatre, 333 Bloor Street East, Toronto, ON, M4W 1G9

Ministry of Health figures state that by 2051, close to 25 per cent of the population will be 65 years of age and over. Over the past few years, there has been a policy development and systemic restructuring shifting the primary focus of healthcare away from the hospital and other institutionalized settings to the home. The cost to support an aging population faces a health & corporate workforce crises. Health care spending that accompanies this shift does not fall within the parameters and protection of the Canada Health Act, which has always dealt only with care provided by physicians and services provided in hospitals. From social services, homecare to patterns of practice changes what are the new trends & some of the supporting technologies? For more information, click here.

Communitech Presents: The Strategic Role of Product Management
January 22, 2008, 8:00 a.m. - 11:30 a.m.
Waterloo Inn and Conference Centre Regent Room 475 King St. North, Waterloo, ON

Are you unclear about the strategic role of product management and marketing at your company? Do you want to learn how to support the strategic activities of your product management department? The Strategic Role of Product Management introduces the Pragmatic Marketing Framework, the standard for technology product management and marketing that has been implemented by thousands of technology companies world-wide. For more information, click here.

SPIF - Funding and Partnering Opportunity for Canada
Friday, January 18, 2008, Vancouver, BC

For the third year in a row SPIF is back and now is part of the Pacific Northwest Wireless Summit (PNWS). Are you looking for smart money or a way to get your foot in the door with the Telco giants? WINBC (a BC Wireless association - www.winbc.org) and the Kerton Group are pleased to announce the return of the Service Provider Investment Forum (SPIF) to Vancouver on January 18, 2008. Many of the world's leading wireless and telecom companies (SPIF) will be in Vancouver soon to seek investment and partnering opportunities with Canada's innovative companies that have products for the Wireless and Telecom Carriers and their clients. Please visit: http://www.pnwsummit.com/

Click here to see ITAC's full event calendar

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