Skywater Technology, Inc. · NASDAQ:SKYT
Skywater Technology — Jefferies Semiconductor, IT Hardware & Communications Technology Summit 2023
41 slides from Skywater Technology's conference presentation, Aug 30, 2023
Slide 1: SkyWater Technology Investor Presentation
SkyWater Technology (Nasdaq: SKYT) Investor Presentation Jefferies Semiconductor, IT Hardware & Communications Technology Summit Four Seasons Hotel Chicago August 30, 2023
Slide 2: Forward-Looking Statements
SkyWater Technology Forward-Looking Statements This presentation and the accompanying oral presentation, including answers to questions, contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements that are based on the Compan
Slide 3: Investment Highlights
Investment Highlights 01 High-Margin ATS Combined with Wafers Services Creates a Scalable Business Model 02 Uniquely Positioned to Serve Megatrends: Artificial Intelligence, Electrification, Medical Implants, Rapid Disease Screening, 5G/6G Communications, Commercialization of Space 03 Seasoned Manag
Slide 4: We streamline the concept to production journey
We streamline the concept to production journey. Technology as a Service Innovation as a Service Manufacturing as a Service 4 ©2023 SkyWater Technology. SkyWater Proprietary.
Slide 5: SkyWater's Unique Model Accelerates Disruption
SkyWater’s Unique Model Accelerates Disruption Technology as a Service (TaaS) Innovation as a Service Manufacturing as a Service Advanced Technology Services (ATS) Wafer Services enable co-creation of differentiated solutions supply customers with ICs and which are the unique expression of the micro
Slide 6: SkyWater is Defining a New Category
SkyWater is Defining a New Category Ability to Transition “Frictionless Productization” to Volume Manufacturing Technology Foundry Specialty Conventional/ Advanced Technology Foundry Services Specialty Foundry Conventional + Target Foundry Moderate Wafer Services customization Minimal High cus
Slide 7: Enabling the Innovation Tail
Enabling the “Innovation Tail” Leading edge Smartphones & PCs Huge volumes, fewer designs Many “low millions” products exist here; This is where future innovation is expected to happen. Production Volume Internet of Things Edge computing Highly customized chips, lower volumes Chip designs 7 ©2023 Sk
Slide 8: TaaS Accelerates Concepts to Market
TaaS Accelerates Concepts to Market Technology as a Service Advanced Technology Services Wafer Services Scientific Research Technology Development Product Development Manufacturing Expanding boundaries of Co-dependent device and process Products designed on mature Qualified products produced current
Slide 9: Model Enables Early Foundry Engagement
Model Enables Early Foundry Engagement Technology as a Service Advanced Technology Services (ATS) Wafer Services Concept & Technology Process Product Volume Product Design Feasibility Demonstration Development Qualification Manufacturing Mixed-Signal Custom Product Process Flows Design Kits Supercon
Slide 10: We are a U.S. based pure-play foundry
We are a U.S. based pure- play foundry Extending a legacy of manufacturing excellence to meet the industry’s needs in a post-Moore’s Law reality Cypress SkyWater 2005 2008 2017 2018 2019 2020 2021 2022 SkyWater SkyWater and $170 M rad-hard 3-year anniversary Florida $112M IPO closed Announced new 65
Slide 11: Bloomington, Kissimmee, West Lafayette sites
Bloomington, MN Kissimmee, FL West Lafayette, IN OPERATION OPERATION FUTURE OPERATION • ~650 employees • ~50 employees • ~750 employees • 200 mm equipment • 200 mm equipment • 200mm/300mm Capability • 91,000 ft² Cleanroom (Class 10 + SMIF) • 35,400 ft2 Cleanroom (class 1,000 & class • Embedded R&D C
Slide 12: CHIPS & Science Act of 2022 – How SkyWater Plans to Execute
CHIPS & Science Act of 2022 – How SkyWater Plans to Execute Minnesota Florida Indiana Legislation Criteria Department of Employment Enterprise Florida & Florida Indiana Economic and Economic Development Department of Economic Development Corporation Opportunity University of Minnesota University of
Slide 13: SkyWater's Indiana Fab
SkyWater’s Indiana Fab Indiana offers a robust business culture, manufacturing expertise and a strong microelectronics ecosystem • Purdue Semiconductor Degrees Program • Birck Nanotechnology Center • Secure Defense Research Thomas Sonderman offers remarks in the Neil Armstrong Hall of Engineering af
Slide 14: Partnership Pathways: Prototype to Production
Partnership Pathways: Prototype to Production Research Commercialization Advanced Wafer Technology Qualification Services Services R&d: r&D: r&d: Primary Activity Proof of Concept Maturing & Qualifying Volume Tech Demonstration Capabilities, Process Flows, and Production Process Development Products
Slide 15: MRLs and Development Phases
MRLs and Development Phases Technology Demonstration / Process Development Manufacturability & High Volume Proof of Concept & Base Process Qual Product Qual Production Scoping Project Kickoff Development MFG Integration Production Ramp Low Rate Full Rate Scoping and business Kickoff meeting to Execu
Slide 16: Diverse Vertical Markets Served by Differentiated Platforms
Diverse Vertical Markets Served by Differentiated Platforms Aerospace Industrial Bio-Health Automotive & Advanced Consumer & Defense and IoT Transportation Computing TaaS model supports disruptive trends across markets TaaS feeds recurring revenue through differentiated engagements Advanced Technolo
Slide 17: Diverse Markets and Technologies Enable Rapid Growth
Diverse Markets and Technologies Enable Rapid Growth Aerospace & Advanced Automotive & Platform Bio-Health Consumer Industrial / IoT Defense Computing Transportation Mixed Signal ● ● ● ● ● Rad-Hard ● ● Discrete Power ● ● ● ● Advanced Packaging ● ● ● ● ● ● Superconducting ● ● 3DSoCs ● ● ● ● ● ● Silic
Slide 18: Technology Categories
Technology Categories Mixed-Signal Rad-Hard MEMS Power Superconducting Photonics Carbon Advanced CMOS Leading Microfluidics Discrete Foundry service Capabilities for Nanotubes Packaging & Flexible Solutions Strategic Rad- MOSFET provider for quantum passive photonic CNT enabled Interposers for Comme
Slide 19: Enabling the Next Wave…SkyWater Chips in Action
Enabling the Next Wave…SkyWater Chips in Action Technology Platform Real World Application Mixed-Signal CMOS Smart Sensors & Edge Processing Power Battery Wearables Management Management Rad-Hard Strategic Defense Commercial & Implantable Nuclear Power Systems Deep Space Medical Devices Generation M
Slide 20: Select Partners & Customers
Select Partners & Customers 20 ©2023 SkyWater Technology. SkyWater Proprietary.
Slide 21: Synergistic Innovation: Open-Source Drives Exponential Growth
Synergistic Innovation Open-Source Drives Exponential Growth in New Designs 21 ©2023 SkyWater Technology. SkyWater Proprietary.
Slide 22: Financial Summary
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Slide 23: Q2 2023 Business Highlights
Q2 2023 Business Highlights • Record revenues exceeded expectations due to continued strong customer demand, the expansion of multiple key ATS programs year to date, and a $3.6 million pull-in of revenues that resulted from the restructuring of one ATS contract. • Gross margin expansion continues to
Slide 24: Q2 2023 Financial Progress
Q2 2023 Financial Progress • Fourth Straight Quarter of Strong Execution ◦ Four quarters of sequential Revenue growth ▪ Trailing-12-month Revenues of $253M grew 50% over prior 12-month period ◦ Four quarters of strong Gross Margin and positive Adjusted EBITDA ▪ Trailing-12-month Adjusted EBITDA of $
Slide 25: Q2 2023 Financial Summary
Q2 2023 Financial Summary Revenue In USD millions Q2 23 Q2 22 Y/Y Q1 23 Q/Q • Strong progress toward our long-term annual growth targets • Total revenue +47% YoY and +6% QoQ ATS Revenue $53.0 $29.8 78% $48.3 10% ◦ ATS growth of 78% YoY reflects $3.6M pull-in of revenue due to restructured contract,
Slide 26: Four Quarters of Sequential Growth = TTM Revenues of $253M
Four Quarters of Sequential Growth = TTM Revenues of $253M 50% Growth Over Prior 12-Month Period in USD $ millions +6% (3)% * Q1 2022 wafer services amount excludes impact of new contract with significant customer 26 ©2023 SkyWater Technology. SkyWater Proprietary.
Slide 27: ATS Revenue by Customer
ATS Revenue by Customer (each color band is a distinct customer) • ATS revenue totaled a record $53.0M in Q2 2023 ◦ 78% growth from Q2 2022 ◦ Exceeded expectations, primarily due to $3.6M revenue pull-in related to restructured contract with commercial ATS customer • 10 largest ATS customers = ~80%
Slide 28: Improving Profitability and Cash Flow Metrics
Improving Profitability and Cash Flow Metrics TTM Adjusted EBITDA of $29M, 11% of Total Revenues in USD $ millions * Q4 2022 Net Income and Adjusted EBITDA included $4.7M revenue event with no associated costs. Q2 2023 Net Income and Adjusted EBITDA included $3.6M revenue event with no associated co
Slide 29: 2023 Business Outlook
2023 Business Outlook • We believe our ATS growth this year will be relatively decoupled from macro weakness in the semiconductor industry. ◦ Our DoD and U.S. Government programs are established, funding is secured, and the scope and scale of these programs has only increased year to date. ◦ On RadH
Slide 30: Multiple Drivers of Future Revenue and Margin Growth
Multiple Drivers of Future Revenue and Margin Growth Extreme Environment Point of Care Diagnostics High Performance Power Advanced Packaging Microelectronics & Genetic Sequencing Management & IoT Execute on 90 nm FDSOI Execute existing programs; Increase penetration with TaaS Enable leading-edge pow
Slide 31: Investment Highlights
Investment Highlights 01 High-Margin ATS Combined with Wafers Services Creates a Scalable Business Model 02 Uniquely Positioned to Serve Megatrends: Artificial Intelligence, Electrification, Medical Implants, Rapid Disease Screening, 5G/6G Communications, Commercialization of Space 03 Seasoned Manag
Slide 32: Appendix
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Slide 33: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation We provide supplemental non-GAAP financial information that our management utilizes to evaluate our ongoing financial performance and provide additional insight to investors as supplemental information to our U.S. GAAP results. We provide non-GAAP gross profit, non-GA
Slide 34: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Q2 Q3 Q4 2021 Q1 Q2 Q3 Q4 2022 Q1 2023 Q2 2023 Total revenue $ 48,101 $ 41,189 $ 35,025 $ 38,533 $162,848 $ 48,121 $ 47,407 $52,326 $65,087 $212,941 $66,094 $69,811 Tool revenue (15,405) (2,346) (281) (1,128) (19,160) (984) (313) (219) (30) (1,546) (536) (936) Reve
Slide 35: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Q2 Q3 Q4 2021 Q1 Q2 Q3 Q4 2022 Q1 2023 Q2 2023 GAAP net loss to shareholders $ (2,811) $ (6,979) $ (13,870) $ (27,036) $ (50,696) $ (16,606) $ (13,005) $ (6,939) $ (3,041) $ (39,593) $ (4,273) $ (8,590) Tool revenue (15,405) (2,346) (281) (1,128) (19,159) (984) (31
Slide 36: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Q2 Q3 Q4 2021 Q1 Q2 Q3 Q4 2022 Q1 2023 Q2 2023 Net loss to shareholders $ (2,811) $ (6,979) $ (13,870) $ (27,036) $ (50,696) $ (16,606) $ (13,005) $ (6,939) $ (3,041) $ (39,593) $ (4,273) $ (8,590) Interest expense 1,058 912 733 839 3,542 1,029 1,040 1,331 2,895 6,
Slide 37: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Q2 Q3 Q4 2021 Q1 Q2 Q3 Q4 2022 Q1 2023 Q2 2023 GAAP EPS Numerator: Net loss attributable to SkyWater Technology, Inc. $ (2,811) $ (6,979) $ (13,870) $ (27,036) $ (50,696) $ (16,606) $ (13,005) $ (6,939) $ (3,041) $ (39,593) $ (4,273) $ (8,590) Undistributed preferr
Slide 38: ©2023 SkyWater Technology. SkyWater Proprietary.
38 ©2023 SkyWater Technology. SkyWater Proprietary.
Slide 39: National Semiconductor Technology Centers to Drive Synergistic Innovation
National Semiconductor Technology Centers to Drive Synergistic Innovation with Path to Secure Manufacturing Incubation at university labs, national labs and private labs Coalesce best new ideas w/ predefined corridors to scale Mechanism to rapidly move innovations to defense & commercial markets Dom
Slide 40: CHIPS & Science Act of 2022 – Potential SkyWater Targets
CHIPS & Science Act of 2022 – Potential SkyWater Targets CHIPS Funding Source Amount SkyWater Target Vision Budgets are notional totals • IN: $1.8B for new 300mm frontend fab construction & tools Grant program for building and expanding • FL: Fab expansion/tools for AP (Deca, GaN, Interposer) $39B s
Slide 41: Potential Technology Evolution by Site
Potential Technology Evolution by Site SkyWater Site Technology Platforms Today Technology Platforms Future Innovation Hub 90nm, 130nm CMOS 45nm, 90nm, 130nm CMOS Minnesota MEMS, Superconducting, MEMS, Superconducting, SiPho SiPho GaN and SiC Innovation Hub Florida 200mm Hybrid Integration 300mm Hyb