Summary
SkyWater Technology is a US based semiconductor manufacturer, while not yet profitable, will be taking advantage of the CHIPS act funding, and i'm willing to wager that they start mass manufacturing before their expected timeline of 2 years, given the state of the entire world at the moment. They already have active contracts with the DOD, and are actively producing RAD-HARD radiation proof semiconductors to be used in sensitive machinery or defense platforms such as orbital launchers and fighter jets. oh and the wafer Joe Biden was holding while signing the CHIPS act? That was a SkyWater produced Wafer. They recently shocked earnings with a beat, with the stock rising 40%. We are still far off from ATHs during the IPO bubble, so this stock in my opinion is ready for huge growth, as the commerce secretary outlines CHIPS act funding later this month: https://www.wsj.com/articles/commerce-officials-to-detail-chips-act-application-process-this-month-11675780344
Why do I think this stock is a great hedge against WW3? Lets say China invades Taiwan (the main producers of semiconductors). I am willing to bet they would then invoke the defense production act on this company, and basically force them to start producing semiconductors. Economic downturn? Well, the cycle for semiconductor foundries during a downturn is to invest in R&D. Skywaters Advanced Technology Services (R&D) already accounts for 50% of their revenue. Either way, if none of the above happens, there is still a massive initiative for US based semiconductors.
Taken From a recent article:
The main highlight of SkyWater's business is that they are an active contractor for the US Department of Defense. This positions them well given the current reconfiguration of the semiconductor supply chain. For the DoD, the firm is focused on producing a very specific and strategic kind of computer chip: radiation-hardened. This means that these chips are able to withstand levels of radiation far beyond that of regular computer chips while continuing to operate normally. This kind of chip is designed to work in outer space, as well as other contexts wherein high levels of radiation could occur.
The company had received an initial commitment of $170M for the development and production of these chips in Q4 2019, with $80M up front. In Q4 2022, the firm announced that the first step of the project had been deemed a success, and the remaining portion of the capital is now set to be paid out.
Conclusion
$SKYT to the moon. My position is 4k shares and calls.
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