Semiconductor maker SkyWater Technology's revenue grew 49% in third quarter

Semiconductor manufacturer SkyWater Technology reported a 49% increase in its third quarter sales at market close Monday.

Pleased investors sent the stock up 31.6% in trading Tuesday.

The Bloomington-based company posted a $6.5 million net loss on sales of $52.3 million, besting the $13 million net loss from a year ago. Its -$0.13 earnings per share was 12 cents better than Wall Street expected.

"While the overall semiconductor industry is experiencing softening business conditions, as we enter 2023, we at SkyWater believe our business is relatively decoupled from the drivers of overall macro weakness. This is due to our unique business model, in which R&D programs and strategic long-term investments drive the majority of our revenues," said Thomas Sonderman, SkyWater's CEO, in a statement.

The company is Minnesota's largest chip factory and has two division. Sales in its advanced technology services (ATS) — which provides engineering support to customers as they develop new technologies — rose 57% during the three-month period, ended Oct. 2. Its smaller wafer services division, which provides contract manufacturing of semiconductor wafers, saw revenue increase 36%.

The company, in its third-quarter report, credited "growth in ATS programs and improved pricing terms for wafer services" for its strong revenue gains.

SkyWater executives said this summer they planned to pursue federal grants made available under the CHIPS Act that Congress passed to address the shortage of semiconductors — a key component in autos and computers. The company said that any grants received would help pay for expansions and new hiring.

In July, the company announced plans for a $1.8 billion manufacturing facility in Indiana, in partnership with the state of Indiana and Purdue University. SkyWater also has operations in Florida.