Ranovus on a mission to build a made-in-Canada semiconductor powerhouse

March 30, 2023

Kanata-based company has partnered with organizations such as the National Research Council to develop technology that makes computer chips faster and more energy-efficient.

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When Hamid Arabzadeh returned to Ottawa in 2010 after working abroad for more than a decade, he noticed a momentous shift in the local tech landscape. Many of the familiar homegrown organizations he’d once admired – including Nortel, where he spent nearly eight years in the optical division at postings in Mexico, Brazil and England as well as Ottawa – were rapidly becoming relics of the past. Nortel, which had filed for creditor protection the previous year, was in the midst of selling its assets to foreign-owned multinationals like Ericsson and Ciena. Talented research engineers that had previously collaborated with the Canadian-owned giant were now developing intellectual property for companies that exported that knowledge elsewhere. “They need to earn a living, right?” says Arabzadeh, the president and CEO of Kanata-based semiconductor firm Ranovus. “So I don’t blame them. If there’s nobody else giving them any money but the multinationals, they will go work with them.” Since then, Arabzadeh and his trailblazing tech enterprise have been on a mission to create a new generation of made-in-Canada IP that aims to transform how data is processed. Arabzadeh, an electrical and computer engineer by trade, helped launch Ranovus in 2012. Since then, the Kanata-based company has partnered with organizations such as the National Research Council to develop technology that makes computer chips faster and more energy-efficient. While Ranovus has poured tens of millions of dollars into building a better microchip, the company has been content to stay under the radar and let other firms in the Kanata tech park capture headlines. In its decade of existence, the firm has raised about $60 million through a combination of venture capital and government funding – cash it used to plug away at getting its patented fibre-optic technology ready for market. This week, Ranovus announced it has secured another $36 million through the federal government’s Strategic Innovation Fund. The new funding will help pay for the firm’s $100-million plan to ramp up production of its next-generation computer chips, which it says use 75 per cent less power than today’s chips powered by electrical circuits. From Arabzadeh’s perspective, the timing couldn’t be better. Driven by the need to train artificial intelligence systems to “think” at lightning speed, computing power has soared to levels almost no one could have dreamed of in Nortel’s heyday. But processing that information requires enormous amounts of energy – in 2021, the world’s data centres consumed more power than entire countries such as Argentina and South Africa, Arabzadeh notes, and demand for ever-faster data-crunching is stretching existing energy capacity to its limits. “Power consumption is a very big element in data centres right now,” he says. Enter Ranovus’s platform, called ODIN. The company says it hopes to scale up production at its Hines Road facility in Kanata and start shipping ODIN to “tier-one U.S. customers” within the next nine months as tech “hyperscalers” like Amazon, Google and Microsoft look to wring more efficiencies out of their cloud-based data-storage infrastructure. “If you want to double capacity, you have to find different architectures to build it with,” Arabzadeh explains. “Most (semiconductor firms) go on a cost play and say, ‘We’re cheaper.’ And we are cheaper than others … but more importantly, it’s the power-consumption savings. “It’s a massive reduction in power for the same speed and same performance. Nobody (else) is doing this anywhere in the world.” For now, Ranovus will continue to assemble its chips at its 15,000-square-foot facility in Kanata. It expects to expand its workforce from 88 full-time employees to more than 200 in short order as production accelerates. But the company will likely need to boost capacity at some point, and Arabzadeh says he isn’t sure if that will mean adding more space in Kanata or looking beyond the National Capital Region. “We’re definitely going to expand,” he says. “Where is something that we’re keeping open right now.” While Arabzadeh is the first to acknowledge the federal government has been a big source of support, he says other levels of government, including the province, have been slower to step up to help companies like his, so they don’t have to carry “all the burden of expansion on our own.” He worries that without a helping hand, the next generation of tech startups will face an uphill battle to compete head-to-head with global giants – especially in a sector like semiconductors, where Canada has not traditionally been a dominant player. “We’re not a semiconductor country, if you like,” Arabzadeh says. “In general, there’s a shortage of senior executives in this field who have (scaled companies) multiple times, who understand what is the market and what are the technologies.” Meanwhile, photonics powerhouses like Ciena, Nokia and others “have attracted the talent,” he adds. “And they’re using the talent to generate IP which reverts back to the home country. That’s really the gap we have.” Arabzadeh says he’d like to see Canadian governments adopt a more “sophisticated” approach to nurturing and protecting the fruits of this country’s intellectual labour, such as requiring foreign-owned entities to form joint ventures with domestic firms in order to qualify for government contracts. Many other countries have such policies in place, he notes. He believes it’s time for Canada to do the same and start “reclaiming back the people we have donated to the multinationals.” The calibre of engineering talent in Canada has never been an issue, Arabzadeh says. It’s who those trailblazing tech minds are working for that needs a rethink. “There’s room to improve and Canada to benefit from the experience of people who are thinking Canada first.”