SkyWater Technology, a trusted partner in advancing semiconductor innovation, has announced a significant milestone in its efforts to enhance domestic semiconductor production. The company has signed a preliminary memorandum of terms (PMT) valued at up to $16 million with the CHIPS for America program, administered by the U.S. Department of Commerce. This proposed funding will bolster SkyWater’s production capabilities at its Minnesota facility, contributing to the modernization and expansion of the domestic semiconductor supply chain.
The CHIPS for America program, part of the CHIPS and Science Act, aims to strengthen the U.S. semiconductor industry by providing federal incentives to key players in the field. For SkyWater, this funding will enable critical upgrades and equipment modernization at its Bloomington, Minnesota facility. These improvements will enhance production capacity to meet the growing demands of customers across various sectors, including aerospace and defense, biomedical, industrial, thermal imaging, and quantum computing. As a Department of Defense (DOD) DMEA Category 1A Trusted Supplier, SkyWater plays an integral role in supplying advanced microelectronics essential for national security and defense programs.
The proposed $16 million award from the CHIPS program will be complemented by an additional $19 million in incentives from Minnesota’s Forward Fund. Together, these state and federal contributions represent a significant investment in the region’s technology infrastructure. SkyWater’s ongoing and planned customer-funded capital expenditure (CapEx) co-investments are projected to reach $320 million through 2026. With the inclusion of these newly announced incentives, total outside investments in SkyWater’s facility are expected to exceed $350 million by the end of the decade. Additionally, SkyWater plans to utilize the Advanced Manufacturing Investment Tax Credit, which is estimated to cover up to 25% of qualified capital expenditures.
Through this substantial infusion of resources, SkyWater anticipates several key outcomes:
- Increased Semiconductor Production Capacity: The company plans to expand its U.S.-based 200 mm semiconductor technology development and production capacity by 30%.
- Job Creation: Approximately 70 new jobs will be generated, supporting workforce growth in Bloomington, Minnesota.
- Modernized Infrastructure: The funding will enable the company to update its facilities to meet the escalating demand for domestically produced microelectronics.
- Supply Chain Security: SkyWater will ensure a reliable supply of trusted silicon for critical DOD and commercial programs.
- Accelerated Innovation: Technology development and time-to-market for customers will be significantly enhanced.
From the inception of the CHIPS program, SkyWater has been a proactive participant, lending its expertise in substrates and process engineering for advanced packaging and underwriting workforce development initiatives at both federal and local levels. The company is also a core partner in the DOD’s Microelectronics Commons network, supporting cutting-edge warfighter applications.
SkyWater’s CEO, Thomas Sonderman, expressed enthusiasm about the proposed funding, stating, “We are pleased to receive this important CHIPS funding, including the Advanced Manufacturing Investment Tax Credit, to expand our nation’s onshore capacity. We’ve been the beneficiary of significant government program awards over the past several years, and we’re proud of our role in helping to expand the domestic microelectronics infrastructure and strengthen the U.S. supply chain. As America’s Trusted Foundry, through our business model and expanding capabilities, we are creating a national asset for technology development, which is in a critical state domestically. The investments today are another milestone along this path.”
The significance of this investment was echoed by government officials. U.S. Secretary of Commerce Gina Raimondo remarked, “The Biden-Harris Administration’s bipartisan CHIPS and Science Act is making targeted investments to meet market demands for technology critical to our national and economic security. Today’s proposed investments across Texas and Minnesota would help bolster domestic chip production and help secure our supply chain for decades to come.”
Similarly, U.S. Senator Amy Klobuchar (D-MN) highlighted the broader implications of this development, stating, “If we want to continue leading the global economy, we must be a country that makes stuff, invents things, and exports to the world. This significant investment in SkyWater Technology will transform domestic semiconductor manufacturing. I’m proud to have worked with SkyWater Technology to secure the resources needed to ensure Minnesota remains at the forefront of technological innovation. This is good for our state’s workers and businesses.”
SkyWater’s advancements through the CHIPS program mark a pivotal step forward for the U.S. semiconductor industry, strengthening its competitive edge in global markets while addressing critical national security needs. The company’s commitment to innovation, workforce development, and supply chain resilience positions it as a cornerstone of America’s semiconductor future.
