INTERNATIONAL Business Machines will expand its Canadian semiconductor packaging and testing plant with more than C$1 billion (S$995 million) in investments over the next five years.

Focused on advanced semiconductor components, IBM’s 800-acre site in Bromont, Quebec, about 50 miles east of Montreal, is the largest of its kind in North America, and home to Canada’s first universal quantum computer.

Packaging, a technical process in which chips are transformed into microelectronic components, is an essential part of the supply chain and requires a skilled workforce. There’s very little semiconductor packaging capacity on the continent, and most of it is at the 1,000-employee Bromont facility.

“Even if we produce the processors at factories in the US or Canada, we would then have to send them back to Taiwan for packaging,” Jamie Thomas, general manager of technology lifecycle services at IBM, said in an interview.

“What you really need is a full supply chain onshore.”

IBM’s C$1 billion Bromont growth plan will unfold between now and 2029, she confirmed. After months of talks with government, IBM will announce a C$227 million first phase on Friday (Apr 26) to expand the plant and build a research and development lab, creating 280 skilled jobs.

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The announcement is “a critical piece to support our growth at this site,” said Thomas. The Canadian government will provide about C$60 million for this first phase, according to a statement.

Last year, when President Joe Biden visited Prime Minister Justin Trudeau in Ottawa, IBM and the Canadian government signed a high-level agreement on semiconductor cooperation. BLOOMBERG