SkyWater Technology Inc. has decided to back away from its original plans to build a $1.8 billion semiconductor manufacturing and research and development facility in Indiana. Despite announcing its land option, SkyWater remains a valuable partner with ongoing research opportunities, according to Tim Doty, a spokesman for Purdue University where the project was to be located. The project was announced in July 2022 by SkiWater of Bloomington, Minn., in collaboration with the state of Indiana and Purdue University. The plan included seeking funding from the federal CHIPS (Creation of Useful Incentives for Semiconductor Manufacturing) and Science Act.
Although SkyWater representatives did not immediately respond to requests for comment, the company previously identified potential risks associated with the Indiana project in its annual report to the Securities and Exchange Commission in March. The report pointed to concerns about meeting the obligations or realizing the expected benefits from the public-private partnership, which could have a significant negative impact on the business, financial condition and results of operations. The CHIPS program aims to allocate nearly $53 million to improve domestic manufacturing and supply chains, drawing attention when President Joe Biden recently announced an interim agreement to provide $6.6 billion to Taiwan Semiconductor Manufacturing Company (TSMC) to build three plants in Arizona.
In discussions related to the CHIPS program, SkyWater has submitted an application for modernization and upgrades at its existing Bloomington production facility, as reported in its February earnings report. Polar Semiconductor, another company planning investments to upgrade its Bloomington plant, is also awaiting word on its application for federal funding. SkyWater, which went public in April 2021, saw growth with reported revenue of $286.7 million for 2023, up 34.6% year-over-year. Despite this growth, the company posted a net loss of $25.1 million for the year.
