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SKYT's Fab-25 Buyout to Aid Wafer Services: What's the Path Forward?
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Key Takeaways
SKYT plans to acquire Fab-25 to drive high-volume chip production and Wafer Services' revenue growth.
A four-year, $1B supply deal is expected to add $300M in 2025 revenues for SKYT and lift cash flow.
Fab-25 expands SKYT's 200 mm CMOS capacity, aligning with U.S. onshoring and secure chip demand.
SkyWater Technology (SKYT - Free Report) is making a strategic move with its planned acquisition of Fab-25 from Infineon Technologies, expected to close on June 30, 2025. The deal is poised to accelerate Wafer Services’ revenues through scalable, high-volume chip production. More than a capacity expansion, it marks the company’s emergence as a key player in U.S. semiconductor manufacturing and supports the growing demand for domestically sourced chips.
Backed by a four-year supply agreement worth more than $1 billion, the Fab-25 acquisition is expected to deliver immediate gains in revenues and cash flow. SkyWater anticipates $300 million in incremental revenues for fiscal 2025. The deal will also scale its Technology-as-a-Service model to a wider customer base, reinforcing Wafer Services as a key pillar of its long-term growth strategy.
Fab-25, a highly advanced 200 mm CMOS facility, will expand SkyWater’s foundry footprint and production capabilities. Its mature-node infrastructure supports critical applications in automotive, industrial and defense markets. By enabling dual-sourcing and addressing increasing demand for secure, U.S.-based semiconductor manufacturing, Fab-25 enhances SkyWater’s relevance in a shifting global supply chain. The facility’s integration also aligns with national onshoring priorities, creating long-term strategic value.
As the semiconductor industry evolves, a combination of 200 mm, 300 mm and panel-based technologies will define the future. Fab-25’s integration positions SkyWater to meet these diverse needs, unlocking new opportunities for both volume production and foundational semiconductor development.
SKYT Faces Competition From Specialty Foundry Leaders
Tower Semiconductor is a leading specialty foundry known for analog and mixed-signal ICs. Tower Semiconductor provides advanced process platforms including SiGe, RF-CMOS, BCD, silicon photonics, MEMS and image sensors. Tower Semiconductor’s strategic partnership with Semtech showcases its excellence in scaling SiGe wafer production, essential for AI, 5G and data center applications, reinforcing its competitive edge in high-performance, mature-node semiconductor solutions.
GlobalFoundries (GFS - Free Report) is a leading foundry, offering scalable 200 mm and 300 mm wafer production with mature-node technologies. GlobalFoundries serves high-demand sectors like automotive, defense and IoT with scalable, cost-efficient production. Competing directly with SkyWater, GlobalFoundries offers broader industry reach, advanced process diversity and greater manufacturing capacity, making GlobalFoundries the preferred choice for customers needing dependable, high-volume mature-node semiconductor solutions.
SKYT’s Price Performance, Valuation & Estimates
Shares of SkyWater have lost 34.3% year to date against the Zacks Electronics – Semiconductors industry’s return of 5.2%.
Image Source: Zacks Investment Research
From a valuation standpoint, SKYT currently trades at a forward 12-month price-to-sales ratio of 1.28, which is at a significant discount compared with the industry’s average of 8.18X. As investors are paying significantly less for each dollar of SKYT's sales compared with the industry, this stock is a great pick for a value investor. SKYT carries a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SKYT’s 2025 loss is pegged at 1 cent per share, unchanged over the past 30 days. The company reported earnings of 6 cents per share in 2024.
Image: Bigstock
SKYT's Fab-25 Buyout to Aid Wafer Services: What's the Path Forward?
Key Takeaways
SkyWater Technology (SKYT - Free Report) is making a strategic move with its planned acquisition of Fab-25 from Infineon Technologies, expected to close on June 30, 2025. The deal is poised to accelerate Wafer Services’ revenues through scalable, high-volume chip production. More than a capacity expansion, it marks the company’s emergence as a key player in U.S. semiconductor manufacturing and supports the growing demand for domestically sourced chips.
Backed by a four-year supply agreement worth more than $1 billion, the Fab-25 acquisition is expected to deliver immediate gains in revenues and cash flow. SkyWater anticipates $300 million in incremental revenues for fiscal 2025. The deal will also scale its Technology-as-a-Service model to a wider customer base, reinforcing Wafer Services as a key pillar of its long-term growth strategy.
Fab-25, a highly advanced 200 mm CMOS facility, will expand SkyWater’s foundry footprint and production capabilities. Its mature-node infrastructure supports critical applications in automotive, industrial and defense markets. By enabling dual-sourcing and addressing increasing demand for secure, U.S.-based semiconductor manufacturing, Fab-25 enhances SkyWater’s relevance in a shifting global supply chain. The facility’s integration also aligns with national onshoring priorities, creating long-term strategic value.
As the semiconductor industry evolves, a combination of 200 mm, 300 mm and panel-based technologies will define the future. Fab-25’s integration positions SkyWater to meet these diverse needs, unlocking new opportunities for both volume production and foundational semiconductor development.
SKYT Faces Competition From Specialty Foundry Leaders
Tower Semiconductor is a leading specialty foundry known for analog and mixed-signal ICs. Tower Semiconductor provides advanced process platforms including SiGe, RF-CMOS, BCD, silicon photonics, MEMS and image sensors. Tower Semiconductor’s strategic partnership with Semtech showcases its excellence in scaling SiGe wafer production, essential for AI, 5G and data center applications, reinforcing its competitive edge in high-performance, mature-node semiconductor solutions.
GlobalFoundries (GFS - Free Report) is a leading foundry, offering scalable 200 mm and 300 mm wafer production with mature-node technologies. GlobalFoundries serves high-demand sectors like automotive, defense and IoT with scalable, cost-efficient production. Competing directly with SkyWater, GlobalFoundries offers broader industry reach, advanced process diversity and greater manufacturing capacity, making GlobalFoundries the preferred choice for customers needing dependable, high-volume mature-node semiconductor solutions.
SKYT’s Price Performance, Valuation & Estimates
Shares of SkyWater have lost 34.3% year to date against the Zacks Electronics – Semiconductors industry’s return of 5.2%.
Image Source: Zacks Investment Research
From a valuation standpoint, SKYT currently trades at a forward 12-month price-to-sales ratio of 1.28, which is at a significant discount compared with the industry’s average of 8.18X. As investors are paying significantly less for each dollar of SKYT's sales compared with the industry, this stock is a great pick for a value investor. SKYT carries a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SKYT’s 2025 loss is pegged at 1 cent per share, unchanged over the past 30 days. The company reported earnings of 6 cents per share in 2024.
Image Source: Zacks Investment Research
SKYT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.