Cluster Building in the Eastern Townships
Bromont is an amazing place. It’s so over-the-top bucolic it’s hard to spot the dark, satanic mills of industry anywhere in the landscape. But, behind the ski hills, past the equestrian parks and golf courses, among the wineries and cideries, big business is happening here, the ICT business.
More than 3,000 people work in two microelectronics plants run by IBM and DALSA in Bromont’s Industrial Park. They have a significant, positive impact on the environment. The technicians, scientists and managers who populate these plants are knowledge workers. They work hard, they are well paid and they have expectations of their community. Schools in Bromont appear to be well appointed, the housing stock is enviable and burgeoning. The town and surrounding area are full of lovely amenities – restaurants, shops, cycling paths and fitness parcours – that most small villages can only dream of. Every visit has left me thinking “Goodness what a lovely place to live and work in.”
The economic history of Bromont and the Eastern Townships begins with agriculture. But in the 19th century a number of light and some heavy industries emerged around milling, mining, tanning and secondary manufacturing. IBM moved into the area in 1972 establishing a modest electronic components plant employing 300 people. In 2002, DALSA Semiconductor bought MITEL’s foundry and moved into the neighborhood. Today IBM’s plant is a major centre for packaging and testing microelectronics. DALSA’s plant has developed a reputation for leading edge work in MEMS and high voltage CMOS. Between them, the two plants provide a northern compass point on the new Champlain Valley tech corridor that is showing great promise.
Two plants don’t make a tech cluster, but with a little leadership and civic will, they might start one. There is no better endorsement for the Bromont lifestyle than the people who work there. They want to keep working there. But in the constantly changing world of microelectronics, that’s never a sure thing. That’s why a couple of years ago, Raymond Leduc, Ralf Brooks, Normand Bourbonnais and a few others began thinking about what the next generation of microelectronics might look like. Together with colleagues from the Université de Sherbrooke and local Bromont business and political leaders, they began to formulate plans for a centre of excellence in microelectronics. And they began to share their vision with their own head offices, the Government of Québec and the Government of Canada. They have a compelling story to tell. Policymakers look at rural parts of their jurisdictions and dream about sustainable, high-value enterprise beyond agriculture and the resource sector. In Bromont, the dream is a reality. Add to this the fact that Raymond, Ralf and Normand are some of the most gracious and persistent people you’d ever want to meet and its no surprise they succeeded in engaging so many others in their plan.
The $218-million funding announced this month for a microelectronics innovation centre is important to our whole industry. It creates a new locus for future discovery in microelectronics while preserving the foundation already built in Bromont. I am delighted to see this combination of vision, pride and tenacity pay off and I look forward to many more trips to the townships. Congratulations, you guys!Tell us your thoughts on this story
Bromont Innovation Centre Signals Significant Growth
The September 1st announcement of a $218.5-million investment in a microelectronics innovation centre in Bromont, Quebec, is a major turning point for the industry in North America, according to founding partner and co-funder DALSA Semiconductors. “The northeast is becoming a very serious cluster for microelectronics,” says DALSA General Manager Claude Jean, and the new innovation centre has the potential to create spinoff benefits and attract additional companies beyond DALSA and co-founder IBM Bromont. In addition to DALSA, IBM and other equipment suppliers, who are providing $40.6 million toward the centre, the Government of Canada is contributing $82.95 million and the Quebec government $94.9 million. The centre will be part of the University of Sherbrooke, located at Technoparc Bromont, southeast of Montreal.
Initially, the project will bring together 250 industry and university researchers, and secure more than 3,000 microelectronics jobs in Quebec. On the larger scale, the new centre will form the northern part of a microelectronics corridor that stretches south across the border to East Fishkill, New York, and encompasses some 35,000 jobs.
The mandate of the centre is “to solve industry problems and bring new technology into production,” says Jean, adding that much of the new technology will be readily transferrable to high-volume production. The users could come from a range of sources.
“It will be accessible to university researchers as well as companies who want to do development. There will be a scientific committee that will report to the centre’s board, and this committee will review the project proposals. So, you could have a university researcher doing work with students, a fabless company that wants to develop a new type of microelectromechanical (MEMS) device, or a company like DALSA that wants to use the centre to test new technologies. It will allow us to do some prototyping, and when the technology is ready to go to volume production we can basically copy and paste the sub-set of equipment.”
Jean says some of the key challenges that DALSA wants to tackle are how to effectively build powerful and effective 200-mm MEMS systems, 3-D wafer level packaging (WLP) and advanced technologies for assembling and packaging silicon chips.
DALSA sees tremendous potential for attracting other microelectronics companies to become members. “Even companies that have their fab but that don’t have this generation of equipment and technology will want to join. We’re expecting several types of potential members, as well as material developers. For example, companies that are trying to develop new materials for MEMS will want to join to work with process and equipment people to prove their materials and finish their development. We already have several equipment vendors that have expressed their interest in joining, bringing demo equipment in so they can work with process developers to speed up the equipment development. So, material, equipment, process, product — we’re expecting that all these types of companies will want to join the centre.”
In addition to being a primary user of the centre for its own product development, DALSA will contribute to the centre’s MEMS and 3-D WLP equipment, as well as assisting in the selection, installation and ongoing maintenance and operation of the equipment. The goal is to provide an operation that allows centre members to build a wide range of prototype devices.Tell us your thoughts on this story
Picture This: ViXS rides the digital video boom
With video applications booming across multiple platforms, Toronto-based ViXS Systems Inc. could not be in a better place. Its advanced system-on-a-chip semiconductors, software solutions and hardware reference designs are helping to power some of the most-popular brands of digital TVs, DVDs personal video recorders and PCs.
What is it like being a relatively small, Canadian-based, fabless semiconductor company in such a hot market? President and CEO Sally Daub, a ViXS co-founder, provided some insight.
ITAC: What is life like for ViXS right now?
Sally Daub: We see lots of opportunity for our kind of component. We initially focused on the Asian/Japanese market, where we’ve found a lot of success. We’ve grown that market over quite a few years, and continue to see more opportunities for companies that want to have some form of gateway-like products – whether it could be in a TV or an HD-PVR box that has advanced video processing. We have a component that seems to be in high demand right now.
What’s it like experiencing that kind of success in such a terrible economy?
I think you’re always probably questioning, because you want to be conservative in trying to figure out what’s going on. We started up in 2001, when the tech bubble burst, and I was trying to do a lot of the fundraising after 9/11, so we’ve always been very conservative and have had to swim against the flow. So right now, what we do is we don’t really try to look at what’s going on in the economy. We just try to focus on what’s going on with our customers and our products, and keep our heads down. Right now, that’s working for us. I think, as you get larger, those kinds of macro-economic issues have a bigger impact, but for our size we have customers we need to get into production, we need to keep growing our product lines.
What are some of the challenges you face?
It’s a next-generation product, so you have to consistently deliver. As a smaller company, you just try to reach out to customers all over the world and continue to scale your operations at the same time.
Are there added challenges when you are a smaller Canadian company?
I don’t think so. I think about this a lot. Sometimes you tend to think you’re not given the same opportunities on the customer side, but I don’t think that’s really the case. In fact, we’ve had more success in Japan than probably any other North American semi guy out there, at least compared to our competitors. I think the same rules apply. Your customers want you to listen. They want you to provide a product that they need. They want you to execute on what you say you’re going to do. I don’t think they really look at you and say, ‘Oh, you’re Canadian.’ There’s always a little bit of an advantage if you’re near your home base, and unfortunately in Canada we just don’t have that. So, we have to go abroad, but I think that probably makes you stronger over the long term.
As a Canadian company that is succeeding in your particular market, what do you see as the most important elements for ensuring that other Canadian technology companies succeed? As you’ve said, ViXS has managed to buck a couple of trends since you started in 2001. For Canadian companies that are newer, smaller, what do you think is most important for their futures?
One of the things is, we just don’t have the same number of senior executives in sales and marketing, and even in the CFO area for tech companies that you might find for other types of companies. I think it’s really important that we try to foster Canadian-based headquarters here so that we can continue to grow that. I think we’re seeing some of that. Companies like RIM are bringing a lot of talent up here. We have some great universities and our engineers can compete with anybody in the world, but I think we have to start expanding our marketing, sales and management know-how here. The other thing is, if you look at places like Israel, Hong Kong and even Beijing, you see how their governments have done a really good job at marketing them as technology centres. In Canada, we’re still known for our oil and gas, and other natural resources. We need to do more to market the fact that we have a strong technology base. It’s not even about the government providing more money; they just need to promote the fact that we have a huge base of highly educated people, that it’s a great place to live and work, and that we have a lot of very successful technology companies here. I don’t think we do that as well as other countries.Tell us your thoughts on this story
Meet ITAC Director Ben Bar-Haim
Like many companies, Advanced Micro Devices (AMD) was hit hard by declining sales in 2008. Demand for PCs and servers was sharply lower. While the recession lingers and revenue losses continue, 2009 will go down as a banner year for AMD. In March, it partnered with Advanced Technology Investment Company—an Abu Dhabi government venture—to create GlobalFoundries, which, in mid-summer, announced the creation of a US$4.2-billion microprocessor manufacturing facility near Saratoga Lake, New York. In September, AMD launched VISION Technology, which “breaks the model in how PC benefits are communicated” to consumers by rating computers by what they can do rather than by processing speed. In addition, AMD continued to focus on its Fusion technology, which it predicts will represent the next generation of silicon chips.
ITAC spoke to Ben Bar-Haim, General Manager, AMD Canada, about the company’s new positioning.
ITAC: Is this a crossroads for AMD?
Ben Bar-Haim: The real crossroad will come in early 2011 when we start shipping the new Fusion parts. That’s what we see as the real crossroad in the industry—not just for AMD, but for the entire market. When we start selling chips that combine the CPU and GPU in the same piece of silicon, full integrated so we can transfer workloads easily, in a very efficient way, at a reduced power-consumption rate.
What does this next generation of chips mean for the industry?
We believe that the microprocessor as a standalone part for the PC industry will slowly disappear. We think that in 2011 Fusion parts will replace the mid-range and lower-range microprocessors, and will eventually replace every x86 microprocessor that is sold into the PC industry. Instead, we’ll have one of these new processors that include the CPU and the GPU in one die.
When it reported on AMD’s new VISION technology, the New York Times called it “the end of the CPU wars” and wrote that AMD had “more or less thrown in the towel” when it came to its competition. Obviously, AMD might disagree.
They missed the point. There were two different points that we made when we introduced VISION. One was that consumers are thoroughly confused when they go to buy a PC about what the system can do for them. They understand the number of gigahertz and megabytes, but they really don’t understand what the PC can and cannot do for them. We suggested to the industry another way to rate PCs and notebooks, so if you walk into Best Buy or Future Shop you can see the level of VISION and choose a product that fits your workload, as opposed to taking the number of gigahertz and translating that into something you can or cannot do.
The other point was that our competitor tends to put out CPUs that have a very small graphics core in the north bridge. The assumption is that you’re really not going to do much with graphics, so you don’t need much silicon for that. Our view of the world is that we’re going make it much more balanced. The GPU is going to be much more important in the balance. We are going to move workloads between GPUs and CPUs to make the system much more efficient for the user.
What is the significance of the opening of the new GlobalFoundries manufacturing facility in upper New York State?
I can’t speak for GlobalFoundries, but the point for them is that they continue to evolve their capabilities so they can meet our requirements for the next few years, as well as the requirements of other fabless design companies. They need to move at a rate that satisfies the industry, and it seems that they are doing that.
The new facility represents a major move back to manufacturing in North America. What are the considerations surrounding manufacturing here rather than overseas?
The point about offshoring is that, when it comes to precision development and innovation, the balance between North America and offshoring is not straightforward at all. If you only go by cost, you would take all development out of North America and move it to places like China and India. But our strategy is to look at the whole package—efficiency, effectiveness, productivity, innovation and cost. You obviously can’t completely take cost out of the equation, but when you calculate the whole equation the decision to go offshore or not go offshore becomes much more complicated. There’s no question that, for me as the General Manager of AMD Canada, the most important part is that we need to keep the rate of innovation very high here in Ontario. If we don’t innovate very quickly we are going to fall behind in the global race.
What are the challenges you face in making that happen?
My message to everyone here in Ontario is that we need to improve partnerships between industry and government. We need to put much more emphasis on innovation. As a province, we don’t do enough to encourage innovation, startups and entrepreneurship kind of thinking among university grads. Ultimately, we are going to be judged and be successful only if we innovate at a much higher rate than we do now.Tell us your thoughts on this story
Winning Formulas For Trying Times
ITAC’s 15th National Executive Forum on Microelectronics will examine the challenge of steering through choppy financial waters.
“Winning in Global Markets in Adverse Times,” which will be held October 14 and 15 at Ottawa’s Crowne Plaza Hotel, features an outstanding lineup of leaders from Canada’s semiconductor industry. The program provides an opportunity to look at the trials and tribulations of today’s volatile markets, including the acquisitions of significant Canadian companies ATI and Tundra Semiconductor, and view them in a broader context of historical norms, from which valuable lessons can be learned.
Ontario’s Minister of Economic Development and Trade Sandra Pupatello is the conference’s keynote speaker, while Bill McClean, President of IC Insights, will explore whether the trend toward IC inventory replenishment will continue. Other sessions will look at the public/private partnership behind the new Microelectronics Innovation Centre in Bromont, Quebec, alternatives to venture funding, and whether Canadian values help or hinder companies when they compete abroad.
Participants include: Denzil Doyle, Chairman, Doyletech Corporation; Douglas Barber, former President, Gennum Corporation; Lance Greggain, President and CEO, Fresco Microchip; Adam Chowaniec, Chairman, Zarlink Semiconductor; and Sally Daub, President, CEO and co-founder, ViXS Systems.
For more information: www.itac.ca/index.php?/events/execforum2009.Tell us your thoughts on this story
ITAC News & Events
- October 6: “Canada’s Place in the 21st Century IT Services Industry” – Montreal
- October 8: Ontario Sales Tax Harmonization Executive Forum – Toronto
- October 14: ITAC Marketing Roundtable, “Detecting Emerging Trends and Patterns in High Tech” – Toronto
- October 14-15: The 15th National Executive Forum on Microelectronics – Ottawa
- October 21: “Preparing for eHealth Transformation Projects and the New Infrastructure Ontario Approach” – Toronto
For a full event listing, and to register for ITAC events, go to: http://www.itac.ca/index.php?/site/events/
Other News and Events
Those confused about the benefits of Ontario’s plan to harmonize its retail sax tax regime with the federal Goods and Service Tax on July 1, 2010, will welcome a business-holistic view of the transition. To ensure that members understand this progressive tax regime, which ITAC believes will ensure a more competitive footing for Ontario business, an Executive Forum on Sales Tax Harmonization is being staged in Toronto on October 8.
Ontario’s Minister of Revenue, John Wilkinson, is the keynote speaker. Other speakers include: Audrey Diamant, Indirect Tax Partner, PricewaterhouseCoopers, and Tom Turchet, ITAC Chair and Vice-President, Software General Business, IBM Canada.
Space is limited. For more information: www.itac.ca/index.php?/site/event_details/1295.
Exploring “Disappeared” Firms
Jeffrey Crellinsten and Douglas Barber were on hand at the annual ITAC
Ontario gathering on September 9 to present the results of their latest study, “Understanding the Disappearance of Early-stage and Start-up R&D
Performing Firms.” Their study reports on the results of a series of interviews Doug and Jeff conducted with the principals and financiers of a number of venture-backed firms that no longer operate. The presentation provided useful insights into the barriers and challenges knowledge-based entrepreneurs face, notably a lack of commerce, competence, sales and customers, as well as poor governance. The study, supported in part by ITAC, is available on the ITAC web site.
The meeting also presented an opportunity to say goodbye to Richard
Campetelli, who is retiring as the Chair of ITAC Ontario to take on new responsibilities with SAP in the United States. Paul Cooper, Vice-President and General Manager, Relationship Sales, Dell Canada, will now serve as Ontario Chair.
Taxpayers Ombudsman Examines SR&ED Program
The Office of the Taxpayers Ombudsman, which is empowered to identify and investigate complaints against the Canada Revenue Agency, has launched an enquiry into whether or not the agency is administering the SR&ED program fairly, following the recent changes to the T661 Form. SR&ED participants can obtain more information at the Ombudsman's web site: www.taxpayersrights.gc.ca/systmc_nqrs/sred-rsde-eng.html.
“The Art of Management” Featuring Marcus Buckingham and Tom Peters – ITAC Members Receive Special Rates
October 16, 2009, Metro Toronto Convention Centre
In these times of accelerating change and uncertainty, “The Art of Management,” presented by Microsoft Dynamics CRM responds to the growing needs of individuals, companies and organizations by delivering unrivalled access to world-class management thinking. Our success is derived from presenting revered management authorities, the few-but-greatest minds that continue to shape and revolutionize the way leaders and organizations think about and address key performance issues for future success. On October 16, you can be part of one of the top management events of 2009, and take advantage of this limited-time special offer. For more information: www.theartofproductions.com/register.html.
Green IT Summit
October 21-22, Toronto
Improve efficiency, optimize IT spending, cut costs, reduce emissions, project a green image, modernize your data centre. Leading case studies include: Wells Fargo, Government of Ontario, Burt’s Bees, BC Hydro, The Hospital for Sick Children, KPMG, California State University, Central Kootenay, Ontario Electronic Stewardship, Canada Post and many more. For more information: www.strategyinstitute.com/102109_git/green_IT.pdf.
“Trends in Global Communications: Wrestling With Unpredictability”
October 26-27, Centre Mont-Royal, Montreal
The International Institute of Communications’ 40th anniversary conference will continue the tradition of facilitating the exchange of empirical data, specialist knowledge and accumulated insights about the telecommunications and media sectors, along with helping to find pointers toward future trends and tent pegs of probability in a landscape of uncertainty. For more details: www.iic-canada.ca/english/2009conference/index.cfm.
Fourth Annual Media Literacy Week
Media Awareness Network and the Canadian Teachers’ Federation are joining together to host Canada’s fourth annual Media Literacy Week, November 2-6. The purpose of the week is to promote media and digital literacy as key components in the education of Canadian youth. This year’s theme — “Media Literacy in the Digital Age” – will focus on the multiple literacy skills needed by today’s youth for accessing, evaluating, re-purposing, creating and distributing digital content. More than 40 collaborating organizations will host a variety of activities across Canada – from small, classroom-based projects to large-scale public events. Collaborators include: the National Film Board of Canada; Office of the Privacy Commissioner of Canada; Canadian Network for Innovation in Education; and the Prime Minister’s Awards of Teaching Excellence. For more information: www.medialiteracyweek.ca.