TORONTO — Xanadu is opening a new factory to make the hardware for its quantum computers, with $195 million in new funding from the federal government. The firm plans to overhaul part of a former Campbell Soup plant in Toronto to manufacture the photonic components for its system. It’s part of Xanadu’s plan to refine and mass-produce quantum computers to combine into a US$1-billion new data centre in the city by 2029. Workers at the 158,000 square-foot facility will prepare the firm’s light-based chips, including testing and packaging, the specialized process of adding connectors and housing to processors. It will be a scaled up version of the $10-million facility Xanadu opened at its Toronto headquarters last June. At the new factory, workers will also assemble the servers and racks that form its machines. The firm expects to spend hundreds of millions of dollars on the initial buildout, but doesn’t yet have a final budget. “Building utility-scale quantum computers will require a new generation of highly specialized manufacturing capabilities,” Xanadu CEO Christian Weedbrook said in a statement. AI Minister Evan Solomon said the federal funding supports “advanced manufacturing and commercialization in Canada.” Ottawa’s backing comes from the Strategic Response Fund (SRF). Xanadu is also part of the Canadian Quantum Champions Program, launched last December, which gave four of the sector’s leading firms an initial $23 million each to keep them in the country. The company was previously awarded $40 million from the SRF’s predecessor program in January 2023 to develop the technical building blocks of its system. Xanadu is also in demand across the border. It’s one of three Canadian quantum computing companies enrolled in a U.S. Defense Advanced Research Projects Agency initiative that could give developers up to US$316 million each if they prove their machines can solve real-world commercial