Company Profile
Introduction
SkyWater Technology (ticker: SKYT) is a pure-play semiconductor foundry specializing in semiconductor research, advanced packaging, and manufacturing. It was spun off from Cypress, a US chipmaker, in 2017. Headquartered in Minnesota, USA, it is an independent company.
Company Highlights
SkyWater’s distinguishing feature is its “Technology as a Service” model, assisting clients in developing customized intellectual property (IP) for applications in computing, defense, aerospace, biomedicine, and automotive industries. Current President Thomas Sonderman is a veteran of the chip industry, having previously worked at AMD and GlobalFoundries.
History
The company was founded in 2017 when private equity firm Oxbow Industries acquired Cypress Foundry Solutions, a subsidiary of Cypress.
Initial Public Offering
SkyWater Technology went public on March 21, 2021, on the US stock market; its ticker symbol is SKYT.
Special Significance to US
An Unofficial Designated Chip Manufacturer
Due to US national security concerns, when chips must be manufactured in the US, SkyWater is the unofficial designated chip manufacturer for the US Department of War, aerospace companies, and advanced academic research institutions.
A Model of US Infrastructure Investment
SkyWater is considered an example of infrastructure investment by the Biden administration. On April 12, 2021, President Biden held up a silicon wafer manufactured by SkyWater, stating that chips represent a form of infrastructure.
Furthermore, it serves as a model manufacturer for the US government’s Chip and Science Act for one reason only——SkyWater is currently the only company that it effectively controls, with all its factories located in the US, and that operates a pure-play foundry business.
Collaborations
SkyWater partnered with Efabless and Google to create the first open-source chip manufacturing program applicable to 90-nanometer chip manufacturing processes.
On August 21, 2021, SkyWater announced an expanded partnership with Rockley Photonics Holdings, focusing on Rockley’s health monitoring solutions.
Company’s Competitive Advantages
Competitive Advantages
- SkyWater is currently the only wholly US-owned pure-play chip foundry: GlobalFoundries is controlled by Abu Dhabi, and Intel has both chip design and foundry businesses.
- SkyWater is one of the very few chip manufacturers authorized and recognized by the US government, academic institutions, and research institutions for future cutting-edge technologies.
- US government funding.
Competitive Disadvantages
- Limited revenue; its current business mainly comes from Cypress, with annual revenue of several hundred million US dollars. Support from the US Department of War’s DARPA project and funding from various US government agencies.
- Before acquiring Infineon’s 65nm fab in mid-2025, SkyWater’s chip manufacturing processes were still at the 90nm and 130nm level, lagging behind the market by about twenty years; 90nm had already been in mass production since 2003, and even 65nm had been in mass production since 2005; in contrast, TSMC has been mass production of 2nm chips in 2025.
A Leader in 3D Chips
3D chips are the absolute core of DARPA’s Electronics Resurgence Initiative (ERI). Of the initial $75 million grant for ERI, this program received $61 million, making it the biggest winner. The goal is to build next-generation chips: 3D chips can achieve a 50-fold increase in computing performance at a lower cost, reportedly achieving the performance of 7nm chips with a 90nm process.
Existing silicon transistor-based chips are seeing performance improvements slow with Moore’s Law, and the space for maneuvering on the chip is limited. Graphene-based carbon nanotube transistors (CNFETs) combined with resistive random access memory (RRAM) can be vertically integrated to form a 3D chip structure with interleaved logic and memory layers, effectively overcoming data transmission bottlenecks. Silicon transistor-based chips cannot construct similar 3D structures because the 1000°C temperatures required to build new circuit layers would damage the underlying circuitry. Carbon nanotube transistors, however, can be constructed at temperatures below 200°C.
Beyond integrating computing and storage chips, 3D chips can also stack sensing chips built with carbon nanotube transistors, forming a more powerful monolithic chip. This architecture is particularly well-suited for AI computing.
SkyWater, the project’s implementer, will collaborate with MIT and Stanford University to turn its 3D chip development concept into a reality for large-scale industrial production within the next three years. If successful, this lower-cost 3D chip manufacturing technology will revolutionize and threaten current traditional 2D chip manufacturing companies like TSMC.
Operations
Fabs and Manufacturing Facilities
As of the end of 2025, SkyWater will have two wafer fabrication fabs and one advanced packaging fab:
- SkyWater Bloomington (Headquarters): The original 200mm semiconductor manufacturing fab in Minnesota.
- SkyWater Austin (Fab 25): Acquired from Infineon in 2025, doubling its 200mm wafer foundry service capacity and expanding its capabilities to the 65nm node.
- SkyWater also operates an advanced packaging facility in Osceola, Florida (near NeoCity), focusing on advanced packaging and heterogeneous integration.
- Due to funding shortages, a planned facility in Purdue University’s Discovery Campus, Indiana, scheduled for construction in 2022, has been cancelled.
Major Clients
- SkyWater’s primary clientele is concentrated in sectors requiring U.S.-based manufacturing, customized IC design, and advanced packaging services, encompassing industries such as defense, aerospace, automotive, medical, and computer/cloud technology. Its core clients include the U.S. Department of War and related aerospace and defense contractors.
- Currently, its business primarily comes from Cypress.
- Department of War: SkyWater has maintained close cooperation with the U.S. military since receiving certification to collaborate with them in 2017. The following year, DARPA approved a collaborative project between SkyWater and MIT for 3D chip research. Since 2019, the company has received up to $284 million in funding from the U.S. Department of Defense.
- SkyWater is manufacturing qubits for D-Wave’s quantum computer, a project that began when SkyWater was still part of the Cypress Group.
Finance and Expansion
Key Acquisitions History
In early 2021, SkyWater acquired a chip manufacturing plant in Oceola, Florida, and converted the University of Central Florida’s NeoCity manufacturing facility into a second manufacturing site. The company expanded the plant and received funding from the Minnesota Department of Employment and Economic Development.
On June 30, 2025, SkyWater Technology acquired Infineon Technologies’ 200mm semiconductor manufacturing plant in Austin, Texas.
Funding comes from US government grants
- Chip and Science Act ($16 million): In December 2024, the U.S. Department of Commerce announced a preliminary agreement to provide SkyWater with up to $16 million in direct federal funding. This funding will be used to upgrade the Bloomington, Minnesota plant, increasing 200mm wafer capacity by 30%.
- In December 2024, Minnesota also pledged an additional $19 million to supplement federal CHIPS funding.
- Department of War (over $170 million): SkyWater previously received $170 million in Department of Defense funding in 2019/2020 for the development and production of military-grade radiation-hardened chips.
- Additional Department of War Funding ($99 million): In September 2022, the Department of War provided SkyWater with up to $99 million in additional funding to advance the mass production of this radiation-hardening technology.
- U.S. Department of War Open Source Funding ($15 million): In July 2022, SkyWater announced it would receive $15 million from the U.S. Department of War to advance its open-source design for its 90-nanometer process.
- Total Government Funding Expected: Based on these announcements, SkyWater has received or pledged over $300 million in direct federal grants, contracts, and CHIPS funding.
- In addition, SkyWater plans to utilize the advanced manufacturing investment tax credit (25% of eligible capital expenditures) under the CHIPS Act.
Capital Market Performance
Market Valuation
As of January 23, 2026, SkyWater’s market capitalization was $1.52 billion, with a price-to-earnings ratio of 12.15.
Stock Price Performance
As of January 23, 2026, SkyWater’s stock price has performed exceptionally well over the past year, accumulating a gain of approximately 177%. Since its IPO on March 21, 2021, the stock price has increased by 50%.
Reasons for Outstanding Stock Price Performance
Three Reasons for SkyWater’s Outstanding Stock Price Performance Over the Past Year:
- Since its IPO in 2010, SkyWater had consistently experienced small losses, approaching break-even. Quarterly profits began to appear in the third quarter of 2024. In particular, the third quarter of 2025 saw a significant turnaround in net profit due to a one-off substantial low-price acquisition gain from the Infineon wafer fab.
- Investors have high expectations for 3D chips: 3D chips can achieve a 50-fold increase in computing performance at a lower cost, reportedly achieving the performance of 7-nanometer chips with a 90-nanometer process. This is considered significant for the US military and is also seen by US media as a crucial step in suppressing China’s chip industry.
- The market is bullish on the semiconductor industry, especially given the tight semiconductor production capacity.
Investment Risks
The following are risks associated with investing in SkyWater:
- The company is actually small.
- The chip manufacturing technology is outdated, and its current competitiveness in the market is very limited.
- The soundness of the financial situation still needs to be verified over time.
These risks are significant; investors must exercise extreme caution before deciding to invest.
I am the author of the original text, the essence of this story was originally featured on Money Magazine, Issue of March 2026
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