TORONTO — The federal government is providing IBM with another $210 million in financing to help the tech giant upgrade and expand its semiconductor packaging plant in Bromont, Que., The Logic has learned.

The firm is one year into a five-year, $1-billion spending plan for the facility. The federal money, which is coming from the Strategic Innovation Fund (SIF), will help IBM pay for equipment upgrades. The company will also work with Centre de Collaboration MiQro Innovation (C2MI), a nearby R&D non-profit, to develop new hardware manufacturing technologies.

IBM’s Bromont campus, opened in 1972, is the largest packager of semiconductors in North America. Packaging is a late stage in the semiconductor manufacturing process, surrounding the silicon bits with pieces that protect them from damage, keep them cool and connect them to other devices. It’s an increasingly important step as chipmakers chasing better performance try to cluster ever-smaller processors closer together.

Ottawa has already backed IBM’s plans for the Bromont plant. In April 2024, then-prime minister Justin Trudeau announced that the SIF would award the firm $59.9 million for the facility expansion as well as its work with C2MI on quantum technologies. At the time, the Quebec government committed $40 million in support for IBM, including a $30-million forgivable loan to buy equipment.

The fresh SIF financing is for a project dubbed “Phase 1.5” that involves “acquisition of advanced packaging capabilities,” according to federal disclosures.

IBM’s Bromont plant is “uniquely positioned to help expand the semiconductor ecosystem across the U.S. and Canada,” said spokesperson Allison Fitton, citing its position as one of North America’s largest testing and assembly facilities. “This new investment builds on critical work started last year to unlock new advancements in cutting-edge chip technology.”

The fresh federal funding is a “powerful vote of confidence in the Bromont ecosystem,” C2MI CEO Marie-Josée Turgeon said in a statement, calling it “a major boost in our capacity to support industry and academic partners with state-of-the-art infrastructure and to accelerate the commercialization of cutting-edge technologies.”

The new SIF award “will secure further investment in the Canadian semiconductor industry,” said Hans Parmar, a spokesperson for Innovation, Science and Economic Development Canada, which manages the program. Canada is “committed to investing” in chip R&D, manufacturing and packaging to “grow our domestic industry, create well-paying jobs and be a reliable and trusted member of global supply chains.”

IBM will have to repay some of the funding based on certain conditions, according to federal disclosures. The innovation department declined to disclose those terms, citing commercial confidentiality.

Most of the world’s advanced chips are currently manufactured and packaged in Asia, primarily in Taiwan. The U.S. has tried to reshore semiconductor production in recent years over concerns about China’s designs on the island, and Canada hoped to play a role. IBM’s Bromont plant became a symbol for cross-border co-operation, with the firm aiming to package processors made at the new U.S. fabrication facilities being built with the backing of the Biden administration’s US$52.7-billion CHIPS and Science Act.

“With all the geopolitics happening these days, there’s a lot of willingness to bring back [the] semiconductor supply chain in North America,” said IBM Bromont site lead Stephen Tremblay, in an interview at last April’s announcement. “We have a very appealing capability to participate.”

A year later, those hopes could be hit by new geopolitical realities. U.S. President Donald Trump has attacked the CHIPS Act, and said he’s planning tariffs on semiconductor imports. Washington has already shown it’s willing to tax sectors that move parts back and forth across the border as part of the assembly process, by targeting Canadian autos.

Still, IBM is continuing with its plans to expand the Bromont plant. Engineers at the site recently helped the firm develop a new co-packaged optic component device that can connect chips together faster and more efficiently using light-based signals.

The SIF has backed other chip projects over the last year, including $8 million for a Teledyne Technologies facility in Bromont, and $120 million for non-profit CMC Microsystems to fund a program that will help researchers commercialize new hardware.