CMC Microsystems extends window for securing new financing; prepares for leadership change

The leaders of CMC Microsystems have announced their retirement after saving the organization from a near-death experience and giving it renewed hope of further funding after current government commitments end in 2019. President and CEO, Dr Ian McWalter, will step down at the end of the current FY after 33 years of engagement and 10 years at the helm. Also stepping down is Dan Gale, VP and CTO, who joined CMC (then known as Canadian Microelectronics Corp) prior to its incorporation in 1984.

McWalter and Gale have spent the last two years addressing a funding crisis precipitated by a decision of the Natural Science and Engineering Research Council (NSERC) to phase out foundational funding for the National Design Network (NDN) (see chart).  The Kingston ON-based agency, which links university researchers and companies and trains the next generation of talent to develop novel microsystems and nanotechnologies, was looking at an orderly wind-down over three years if alternate sources of support were not secured.

Instead, the duo convinced the federal government to extend NDN’s base funding for three more years at its full funding level, giving the organization more time to identify a new funding source. Alternately, it could re-model its operations to conform to existing programs such as the Canada Foundation for Innovation’s Major Science Initiative (MSI) fund, the Networks of Centres of Excellence program or the Strategic Innovation Fund (SIF) of the Department of Innovation, Science and Economic Development (ISED).

“CMC provides services not cash, which in a way makes our model unique and this is why our funding is piecemeal. We don’t fit into any current funding models,” says McWalter. “We may transform into something different, which is likely, or stay the same, which is less likely.”

McWalter says he remains optimistic that an existing, stable funding source can be identified to support CMC’s operations so that it can continue to play a key role in Canada’s micro- and nanoelectronics sectors. Each year it supports the training of between 500 and 1,000 graduates, many of whom go on to join industry. To ensure that graduates continue to meet the future needs of industry, McWalter and Gale have worked to update the CMC vision with a strong emphasis on advanced manufacturing.

“I’ve always been involved in making things throughout my career and that has kept design on the leading edge. If the circle between manufacturing and design is broken, you’ll fall behind,” says McWalter. “We go from materials research to (semiconductor fabrication) foundries, which is a huge continuum. The link must be maintained.”

With typical understatement, McWalter describes funding support for CMC as “complex”, involving different departments, agencies and levels of government. He favours a scenario in which investigator research is provided with more support and industry maps out its problems 10 years out and solicits academic involvement.

“For Canada, funding problems are quite intractable and heading in the opposite direction … Collaboration works well and CMC has tried to do it for the past 30+ years,” says McWalter. “There’s room for ISED in the middle. They support companies and sectors and could expand into areas like ours with academic and industrial components.”

On the technology readiness level (TRL) scale of 1 to 9 between fundamental research and the market, CMC occupies the 4-6 spectrum. That includes R&D for component and breadboard (construction base for prototyping of electronics) validation in a lab environment and an industrial environment and system/subsystem model or prototype demonstration in a relevant environment. To  qualify for funding under the CFI’s MSI fund, CMC would have to move its focus to TRL 2-5, whereas ISED eligibility would necessitate a shift closer to commercialization (TRL 5-8).

McWalter says he’s also interested in the Strategic Investment Fund (SIF), a new umbrella organization within ISED that combines the Strategic Aerospace and Defence Initiative, the Technology Demonstration Program, the Automotive Innovation Fund and the Automotive Supplier Innovation Program. Of the four streams of funding being offered, he says Stream #4 could be a potential source of new CMC funding. Its aim is to “advance industrial research, development and technology demonstration through collaboration between academia, non-profit organizations and the private sector” — a description that adheres closely to CMC’s focus and operations.

While CMC continues its deliberations on whether to remain the same and push for organization-specific funding or change to fit into an existing funding model, the stable NSERC funding base provides an 18-month window. It will also use this time to recruit new leadership which will be discussed in detail at its next board meeting in late September.

“We have a strong exit strategy now. Over the past two years we kept CMC going and put down strong markers that fit with the recommendations of the Naylor report and what we see as changing at the National Research Council. We’re laying the groundwork for the future but we’re not done yet,” says McWalter. “Now we’re looking for the right people to run the organization for the next five or 10 years — new people with their own ideas and doing things in new ways. They have to link academics and industry in a Canadian environment.”

Financial support for CMC has always been something of an anomaly within the Canadian S&T funding landscape and renewal continues to be a challenge as those who are familiar with its role in Canada’s research and industrial sphere retire. McWalter and Dale have made many trips to Ottawa to speak with officials and senior political aids to make the pitch for new funding once NSERC’s support for the NDN runs out in 2019.  The task was complicated by the pending Innovation Agenda (now titled Innovation & Skills Plan) which had not been released when CMC was lobbying.

“I don’t know exactly what happened after we spoke with officials and bureaucrats, including the chiefs of staff for ministers. They could not make a long-term decision until the Innovation Agenda advanced further so we pushed for funding for another year through NSERC (following the negotiation of a two-year extension in 2016),” says McWalter. “The extra year allowed the Innovation Agenda to roll out and I also think the CMC was too valuable to shut down. I remain optimistic.”

That optimism was bolstered early this year with the announcement that CMC had won a $7-million award from the CFI’s MSI fund, effectively giving the NDN status as a national research facility.

“We have no interests other than benefits to Canada. We’ve always had an ISED champion in the past. Will that person emerge again? I hope so,” says McWalter.

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