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SkyWater Technology (NASDAQ:SKYT) is a US-based semiconductor foundry operating at a time when domestic chip manufacturing has become strategically important. These sectors are not necessarily surging, but its exposure to the quantum market positions it as something of a growth stock.
So I asked ChatGPT whether I should buy it. And the answer was useless… so I just researched the stock myself.
A national leader
The company provides wafer services and advanced manufacturing support for customers in defence, aerospace, and emerging computing markets, including quantum technologies. Recent financial results and strategic developments have materially changed the scale and visibility of the business.
The most significant development has been the acquisition of the Fab 25 manufacturing facility in Austin, Texas. This transaction expanded SkyWater’s production capacity and increased its share of the US 200mm foundational semiconductor foundry market from around 4% to around 17%.
As a result, the company’s now the largest exclusively US-owned pureplay foundry, strengthening its role within domestic and government-aligned supply chains. That’s certainly a good position to hold when you’re serving industries like defence.
This expansion was clearly reflected in the company’s third-quarter results. Revenue reached $150.7m, up 61% year on year and 155% sequentially.
Nearly $87m of the quarter’s revenue came from wafer services at the Texas facility, which exceeded management expectations. Non-GAAP gross margin improved to 24.6%, while adjusted EBITDA rose to $25.8m.
For the quarter, SkyWater also reported non-GAAP earnings per share of $0.24. Sadly, we can’t extrapolate that to a yearly basis — otherwise it would be trading around 16 times forward earnings.
Where’s the quantum bit?
Beyond traditional wafer manufacturing, SkyWater operates an Advanced Technology Services (ATS) segment. This division follows a ‘technology-as-a-service’ model, partnering with customers on development programmes rather than simple volume production.
During the last quarter, ATS revenue exceeded $54m, benefiting from customer-funded research activities and milestone payments. Management’s indicated that this model provides improved revenue visibility and supports working capital during programme ramp-ups.
And that leads us to its quantum computing-related work. SkyWater signed four new quantum customer engagements since the second quarter, supporting multiple hardware modalities.
Management said quantum revenues represented the strongest quarter to date for this activity and expects similar growth rates next year. However, management also said that quantum computing represents a “modest component of overall revenue”.
Quantum computing is something of a buzzword in 2025, and that does make me wonder if management’s just leveraging this exuberance to breathe some life into the share.
What the numbers tell us
Looking ahead, it guided for fourth-quarter revenue of $155m–$165m. For 2026, the company reiterated its baseline expectation of at least $600m in annual revenue and adjusted EBITDA of at least $60m.
That means it’s trading around 1.5 times 2026 sales. That’s roughly a 50% discount to the information technology sector average.
But profitability is the company’s issue. For 2026, it’s trading with an enterprise value (this is market-cap plus net debt)-to-EBITDA ratio of 17. That’s a 20% premium to the market.
For me, SkyWater Technology represents a business worth monitoring closely as execution progresses over the next several years. More data on this quantum segment will be key to that.
