SkyWater Abandons Plans for $1.8 Billion Semiconductor Facility in Indiana Amid Concerns About Obligations and Risks

SkyWater Technology Inc. has decided to abandon plans for the construction of a $1.8 billion semiconductor production and R&D facility in Indiana, despite having released its option on the land. Despite this decision, the company remains a valuable partner with ongoing research opportunities, according to Tim Doty, a spokesman for Purdue University. The project was initially announced in partnership with SkyWater, the state of Indiana, and Purdue University in July 2022, with plans to seek federal CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act funding.

SkyWater did not provide immediate comment on the decision, but potential risks associated with the Indiana project were outlined in its annual report filed with the Securities and Exchange Commission in March. The report highlighted potential impacts on the company’s business, financial condition, and results of operations if obligations concerning public-private partnerships were not met.

The CHIPS program aims to revitalize domestic manufacturing and supply chains by providing nearly $53 million in funding. President Joe Biden recently announced a preliminary agreement to allocate $6.6 billion to Taiwan Semiconductor Manufacturing Company (TSMC) for the construction of three factories in Arizona. SkyWater submitted a CHIPS application in the fourth quarter for enhancements at its Bloomington manufacturing facility, while Polar Semiconductor also expressed interest in investing $420 million for upgrades to its Bloomington plant.

Surya Iyer, president of Polar Semiconductor, revealed that the company is anticipating feedback from the federal government regarding its CHIPS application. SkyWater reported revenue of $286.7 million for 2023, marking a 34.6% increase from the previous year but recorded a net loss of $25.1 million for the year.

In conclusion, SkyWater Technology Inc.’s decision not to move forward with building a semiconductor production facility in Indiana highlights concerns about meeting obligations concerning public-private partnerships and potential impacts on their business operations and financial health.

Representatives from SkyWater did not provide immediate comments on their decision not to move forward with building a semiconductor production facility in Indiana.

However, potential risks associated with this project were outlined by SkyWater Technology Inc., which went public last year.

The CHIPS program aims to revitalize domestic manufacturing and supply chains by providing funding.

President Joe Biden recently announced that he would allocate $6.6 billion for Taiwan Semiconductor Manufacturing Company (TSMC) for constructing three factories in Arizona.

Other companies such as Polar Semiconductor also expressed interest in investing funds into upgrading their facilities.