BLOOMINGTON, Minn. - SkyWater Technology (NASDAQ: SKYT), a semiconductor manufacturer and U.S. Department of Defense (DOD) accredited Trusted Supplier with a market capitalization of $392 million, has signed a preliminary memorandum of terms with the CHIPS for America program, potentially unlocking up to $16 million in federal funding. According to InvestingPro data, the company has demonstrated strong revenue growth of nearly 27% over the last twelve months, despite operating with relatively thin gross margins of 18.5%. This move is aimed at bolstering production at its Minnesota facility, with a focus on markets such as aerospace, defense, biomedical, and quantum computing.
The federal contribution via the CHIPS Act is designed to accelerate modernization and equipment upgrades, increasing the company's 200 mm semiconductor technology production capacity by an estimated 30%. This will be supplemented by $19 million from the State of Minnesota's Forward Fund, with the total external capital expenditure (CapEx) investments expected to surpass $350 million within this decade.
SkyWater anticipates that these investments will generate around 70 new jobs in Bloomington and ensure a steady supply of trusted silicon for critical DOD and commercial programs. Additionally, the company plans to leverage the Advanced Manufacturing Investment Tax Credit, which could provide up to a 25% rebate on qualified CapEx. With analyst price targets ranging from $8.50 to $15.00, InvestingPro subscribers can access detailed financial health metrics and 12 additional exclusive ProTips to better evaluate this high-beta stock (Beta: 3.72).
The CHIPS Act, part of a bipartisan initiative by the Biden-Harris Administration, targets investments to strengthen the domestic semiconductor industry, deemed essential for national and economic security. U.S. Secretary of Commerce Gina Raimondo and U.S. Senator Amy Klobuchar (D-MN) have both acknowledged the strategic importance of these investments for sustaining U.S. leadership in global technology and manufacturing.
SkyWater's CEO, Thomas Sonderman, expressed gratitude for the CHIPS funding and tax credits, highlighting the company's role in expanding the U.S. microelectronics infrastructure and strengthening the supply chain. For comprehensive analysis of SKYT and 1,400+ other US stocks, InvestingPro offers detailed research reports that transform complex financial data into actionable intelligence for smarter investment decisions. The funding is seen as a milestone in SkyWater's ongoing efforts to meet the defense and commercial sector's technological needs.
This financial boost comes as SkyWater continues to participate in various facets of the CHIPS program, contributing its expertise to support the nation's chip supply. The information regarding SkyWater's funding and expansion plans is based on a press release statement.
In other recent news, SkyWater Technology reported a record Q3 2024 revenue of $94 million, alongside a positive non-GAAP earnings per share of $0.08. This financial success was attributed to operational efficiencies and significant recovery from a previous cost accrual. The company also projected Q4 revenue to range between $72 million and $76 million, forecasting an 18% to 20% revenue growth for the full year of 2024.
In addition to these earnings highlights, SkyWater Technology has extended its loan and security agreement with Siena Lending Group LLC, increasing the facility amount from $100 million to $130 million and extending the maturity date to December 31, 2028. This financial restructuring is part of the company's broader strategy to secure long-term financial stability.
SkyWater Technology has also announced a multiyear supply agreement with NanoDx, which is expected to drive future growth through significant customer co-investment and new tooling capabilities. Despite a sequential decline in ATS development revenue, the company's overall financial health and future projections remain robust. These are recent developments that have shaped the company's financial trajectory.
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