SkyWater Technology Inc.: Pulling Back from $1.8 Billion Indiana Semiconductor Project but Still Invested in Domestic Manufacturing and Growth

SkyWater Technology Inc. has decided not to proceed with its plans to construct a $1.8 billion semiconductor production and R&D facility in Indiana. The company has released its option on the land, but remains an important partner for Purdue University with ongoing research opportunities. In a recent press release, representatives from SkyWater have stated that they are taking a step back from the project due to potential risks associated with the venture and concerns about meeting obligations and achieving anticipated benefits within the expected timeframe.

In their annual report filed with the Securities and Exchange Commission, SkyWater acknowledged these risks and expressed their concerns about the project. However, despite this setback, SkyWater has shown growth as it reported an increase in revenue for 2023, totaling $286.7 million. Despite this growth, the company also recorded a $25.1 million net loss for the year.

SkyWater submitted a CHIPS application in the fourth quarter of the previous year for modernization and upgrades at its Bloomington manufacturing facility. Meanwhile, Polar Semiconductor, also located in Bloomington, is awaiting news on its own CHIPS application after expressing intentions to invest over $420 million in upgrades for its facility.

As for President Joe Biden’s recent announcement of a preliminary agreement with Taiwan Semiconductor Manufacturing Company to support domestic manufacturing and supply chains through the CHIPS program, it is unclear how this will impact SkyWater’s decision to pull back from the Indiana project.

Overall, while SkyWater may have withdrawn from the Indiana project due to potential risks associated with it, their growth as a company and other developments in the industry suggest that they are still invested in advancing their operations and capabilities in semiconductor production and R&D.