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US, Canada plan North American chip corridor, starting with IBM expansion

FILE PHOTO: Illustration picture of semiconductor chips

By Stephen Nellis

(Reuters) - The United States and Canada said on Friday they would work together to create a bilateral semiconductor manufacturing corridor, as International Business Machines signaled its intent to expand in Canada.

The news came as U.S. President Joe Biden, who is visiting Canada, issued a joint pledge with Canadian Prime Minister Justin Trudeau to stand together against authoritarian regimes in part by reducing their dependence on other countries for critical minerals and semiconductors.

The Canadian government will spend C$250 million ($181.94 million) on its domestic semiconductor industry to boost research and development and manufacturing, the prime minister's office said in a statement.

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In a joint statement, the two leaders said IBM would provide "a significant investment to develop new and expanded packaging and testing capabilities at its Bromont facility (in Quebec) as part of a Memorandum of Understanding."

The countries did not disclose the amount of IBM's investment in Canada.

IBM maintains semiconductor research and manufacturing operations in upstate New York. Last year, the company said it plans to invest $20 billion in New York's Hudson Valley region, once a manufacturing powerhouse, over the next decade to make and develop semiconductors, mainframe technology, artificial intelligence and quantum computing.

($1 = 1.3741 Canadian dollars)

(Reporting by Stephen Nellis in San Francisco; Editing by Richard Chang)