SkyWater Technology, LLC

Our corporate headquarters and a fabrication facility are located in Bloomington, Minnesota, a 356,000 square foot facility. In 2020, SkyWater Technology Foundry entered into a sale leaseback transaction with Oxbow Realty, an affiliate of our principal stockholder, and we now lease the property from Oxbow Realty for 20 years.

SkyWater Florida

In 2021, we expanded our operations with the addition of the Center for NeoVation, an advanced packaging facility in Kissimmee, Florida. The facility is operated and maintained by SkyWater through a public-private partnership with Osceola County, Florida which is developing a broader technology and STEM education infrastructure at the same campus where the Center for NeoVation is located. We utilize the 109,000 square foot facility, with approximately 36,000 square feet of cleanroom space, to address emerging commercial and government agency needs for U.S.-sourced electronics. See Note 2 – Basis of Presentation and Principles of Consolidation in the notes to our consolidated financial statements for additional information. We also lease office space adjacent to the Center for NeoVation in Kissimmee, Florida, which consists of approximately 6,000 square feet and our agreement for such office space expires in January 2039.

SkyWater Texas

In June 2025, we expanded our operations with the addition of a manufacturing facility in Austin, Texas (Fab 25). SkyWater Texas is a high-volume manufacturer that provides Wafer Services product offerings focused on 200 mm semiconductor fabrication, copper processing, high-voltage technology services and 65 nm node infrastructure support. This facility is approximately 1,223,000 square feet in size, with approximately 375,000 of the square footage being specific to cleanroom space.

• Our customers may cancel their orders, change production quantities, or delay production, and if we fail to forecast demand accurately, we may incur supply shortages or lose revenue.
• A material decrease in demand for products that contain semiconductors may decrease the demand for our services and products, and a decrease in the selling prices of our customers’ products may significantly affect our business, financial results and financial position.
• Our industry has experienced rapid technological changes, and new technologies may prove difficult to commercialize or may not gain market acceptance by our customers, which may have a material adverse effect on demand for our products and service offerings.
• We have a finite amount of production capacity, and to the extent customer demand exceeds our capacity, we may lose customers and potential revenues.
• We currently have limited or no redundancy in certain of our manufacturing tooling and infrastructure equipment, and we may lose revenue and be unable to maintain our customer relationships if we lose our production capacity.
• A significant portion of our sales are derived from three customers, the loss of which would adversely affect our financial results.
• We may not be able to successfully diversify our customer base and penetrate new markets, which would negatively impact our growth strategy.
• Our expansion strategy carries inherent risks.
• We depend on successful parts and materials procurement for our foundries. Shortages and/or increases in the prices of these raw materials could interrupt our operations and result in a decline in revenues.
• Our dependence on a limited number of third-party suppliers for key components and capital equipment used in our manufacturing process could prevent us from delivering our products to our customers within required timeframes, which could result in order cancellations and loss of market share.
• The costs incurred by us to provide development services and manufacture our wafers may be higher than anticipated, which could hurt our ability to earn a profit.
• A breach of our security systems or a cyberattack that disrupts our operations or results in the breach of confidential information about us, our technology, or our customers could harm our business and reputation, and could expose us to costly regulatory enforcement and other liability.
• We may use artificial intelligence in our business and operations, and challenges with properly managing its use could harm our business and expose us to costly liability.
• We operate in the highly cyclical semiconductor industry, which is subject to significant downturns that may negatively impact our results of operations.
• Because the markets in which we compete are highly competitive and many of our competitors have greater resources than us, we may not be able to compete successfully, and we may lose or be unable to gain market share.
• Existing or future customers could eventually transition their business to a competitor with a higher production capacity or lower-cost means of production.
• We are a party to a public-private partnership, and if we or our counterparty fails to meet the obligations of our agreement, or if we are not able to realize some or all of the anticipated benefits of such partnership in the anticipated time frame or at all, our business, results of operations and financial condition may be materially and adversely affected.
• Planned efficiency and cost-savings initiatives could disrupt our operations or adversely affect our results of operations and financial condition, and we may not realize some or all of the anticipated benefits of such initiatives in the anticipated time frame or at all.
• If we are unable to attract, train, and retain highly qualified personnel, the quality of our services may decline, and we may not successfully execute our internal growth strategies.
• We may face litigation in the future, including potential product liability claims.
• We are exposed to various possible claims and hazards relating to our business, and our insurance may not fully protect us.
• Changes in trade policies, including the imposition of, or increase in tariffs and changes to existing trade agreements, could negatively impact our business, financial condition and results of operations.
• We are exposed to risks associated with a potential financial crisis and weaker global economy.
• Our sales cycles are long and unpredictable, and our sales efforts require considerable time and expense, which could adversely affect our results of operations.
• Certain of our purchase orders are cancellable until shortly before the start of production, and our lack of significant backlog makes it difficult for us to forecast our revenues and margins in future periods and may cause actual revenue and results to fall short of expectations.
• We may manufacture wafers based on forecasted demand, and if our forecasted demand exceeds actual demand, we may accumulate obsolete inventory, which may have a negative impact on our financial results.
• Earthquakes, fires, power outages, floods, terrorist attacks, wars, public health issues, and other catastrophic events could disrupt our business and ability to serve our customers and could have a material adverse effect on our business, results of operations or financial condition.
• Our operating results may prove unpredictable, which could negatively affect our profit.
• As a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common stock.
• Failure to meet environmental, social, and governance (“ESG”) expectations or standards could adversely affect our business, results of operations, financial condition, and stock price.
• We may not realize the anticipated benefits of the Transaction and any benefit may take longer to realize than we expect.
• Risks Relating to the Ability to Raise Financing and Our Indebtedness
• Increased leverage may harm our financial condition and results of operations.
• We may need to raise additional capital or financing to continue to execute and expand our business.
• Our indebtedness could adversely affect our cash flows and limit our flexibility to raise additional capital.
• Our Loan Agreement contains restrictive covenants that may impair our ability to conduct business.
• Risks Relating to Government Regulation
• We are a party to several significant U.S. Government (“USG”) contracts, which are subject to unique risks.
• Changes to DoW business practices could have a material effect on the DoW’s procurement process and adversely impact our current programs and potential new awards.
• Our international sales and domestic operations are subject to applicable laws relating to trade, export controls, and foreign corrupt practices, the violation of which could adversely affect our operations.
• Failure to comply with the broad range of laws, regulations, and standards in the jurisdictions in which we operate may result in exposure to substantial disruptions, costs, and liabilities.
• Risks Relating to Intellectual Property
• We depend on intellectual property to succeed in our business, and any failure or inability to obtain, preserve, enforce, defend, and protect our technologies or intellectual property rights could harm our business and financial condition.
• We depend on intellectual property licensed from third parties to succeed in our business, and any failure or inability to obtain or preserve rights under third-party licenses could harm our business and financial condition.
• Our collaboration with others regarding the development of technologies and intellectual property may require that we restrict use of certain technologies and intellectual property and may result in disputes regarding ownership of or rights to use or enforce intellectual property rights, which could harm our business and financial condition.
• Claims by others that we infringe their proprietary rights could harm our business and financial condition.
• We use open source software and other technology, which could negatively affect our business and subject us to litigation or other actions.
• Risks Relating to Ownership of Our Common Stock
• The price of our common stock has been volatile and may continue to fluctuate substantially.
• We do not intend to pay dividends in the future and any return on investment may be limited to the value of our common stock.
• We are a holding company and rely on dividends, distributions, and other payments, advances, and transfers of funds from our subsidiaries to meet our obligations.
• We are an “emerging growth company” and our election to comply with the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.
• Effective December 31, 2025, we no longer qualify as a “smaller reporting company” and, commencing with our Quarterly Report on Form 10-Q for the first quarter of 2026, we may no longer take advantage of reduced disclosure and reporting requirements applicable to smaller reporting companies.
• Provisions in our certificate of incorporation and bylaws and in Delaware law could discourage takeover attempts even if our stockholders might benefit from a change in control of our company.
• Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or with our directors, our officers, or our other employees.