SkyWater is a pure play chip foundry.

That means it makes chips for other companies, similar to TSMC. Customers design the chips. SkyWater builds them in its own factories, called fabs. It does not sell its own chips or consumer products. Instead It works with fabless chip companies, large chip makers, and equipment companies that do not want to run their own fabs. And SkyWater focuses only on manufacturing and the engineering behind it.

SkyWater works very early in the chip process. Customers often come with just an idea or early design. SkyWater helps turn that idea into a real chip. This includes choosing materials, figuring out how the chip should be built on silicon, testing prototypes, and then producing the chips at scale. It supports the full path from design to volume production in the same fab.

This model is called Technology as a Service.

The big difference versus companies like TSMC is the type of chips SkyWater makes. Its chips are usually not the most advanced or smallest chips. Instead they are highly specialized. They are built for reliability, safety, and security. Many are radiation hardened for space and defense, mixed signal chips, MEMS, power devices, or fully custom designs.

These chips are used in aerospace and defense systems, cars, industrial equipment, medical and biotech devices, and some advanced computing and quantum related projects. These are the sectors where customers care more about trust, long lifetimes, and U.S. production than about the lowest cost or fastest node.

It’s been growing steadily until this recent quarter. In FY2024, the company did about $340M in revenue and was only barely profitable. Then last quarter alone, revenue jumped to around $150M, which is close to half of last year. That’s because their newly acquired fab in Texas added a ton of production capacity and revenue right away. Overall, business is accelerating.

At the same time, there has been noticeable institutional buying over the past few months. Large investors and institutions are building positions. And it just broke out of a 3 months long consolidation. This is one to watch very closely.