SkyWater Technology Aims to Boost U.S. Semiconductor Production with CHIPS Act Funding
Bloomington, Friday, 6 December 2024.
SkyWater Technology’s $16 million CHIPS funding proposal, combined with Minnesota’s $19 million incentives, aims to increase semiconductor capacity by 30% and create 70 jobs in Minnesota.
Federal and State Funding Details
SkyWater Technology (NASDAQ: SKYT), a trusted technology realization partner, announced on December 5, 2023, that it has signed a preliminary memorandum of terms with the CHIPS for America program [1][2]. The proposed federal funding of $16 million, combined with $19 million in incentives from the State of Minnesota’s Forward Fund, represents a significant investment in domestic semiconductor manufacturing [1][3]. The company, which reported a market capitalization of $392 million and 27% revenue growth over the past twelve months, will utilize these funds to enhance its Minnesota facility’s production capabilities [5].
Investment Impact and Expansion Plans
The combined funding package will complement SkyWater’s existing customer-funded capital expenditure commitments of $320 million through 2026, bringing the total expected investment to over $350 million this decade [1][2]. As a Department of Defense (DOD) DMEA Category 1A Trusted Supplier, SkyWater plans to increase its U.S.-based 200mm semiconductor technology development and production capacity by 30% [2][3]. The expansion will create approximately 70 new jobs at their Bloomington, Minnesota facility, focusing on aerospace, defense, biomedical, industrial, thermal imaging, and quantum computing markets [1][2].
Financial Outlook and Growth Trajectory
SkyWater’s financial performance shows strong momentum, with a record Q3 2024 revenue of $94 million and projected Q4 revenue between $72 million and $76 million [5]. The company expects an 18% to 20% full-year growth for 2024 [5]. Additionally, SkyWater will benefit from an Advanced Manufacturing Investment Tax Credit of up to 25% on qualified capital expenditures [1][3]. The company has also strengthened its financial position by extending its loan agreement with Siena Lending Group LLC, increasing the facility from $100 million to $130 million, with maturity set for December 31, 2028 [5].
Strategic Importance and Leadership Support
U.S. Secretary of Commerce Gina Raimondo emphasized that these investments align with the Biden-Harris Administration’s commitment to strengthening domestic semiconductor manufacturing [2]. U.S. Senator Amy Klobuchar (D-MN) highlighted the transformative potential of this investment for domestic semiconductor manufacturing [2]. SkyWater CEO Thomas Sonderman noted that this funding represents a crucial step in expanding the nation’s onshore capacity and strengthening the U.S. supply chain [2][3].