Skywater Technology, Inc. · NASDAQ:SKYT
Skywater Technology — 26th Annual Needham Growth Conference (January 2024)
40 slides from Skywater Technology's conference presentation, Jan 18, 2024
Slide 1: SkyWater Technology Investor Presentation
SkyWater Technology (Nasdaq: SKYT) Investor Presentation 26th Annual Needham Growth Conference New York, January 18, 2024
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: 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 12: Reshoring the Future of Heterogenous Integration
Reshoring the Future of Heterogenous Integration SkyWater to be first U.S. provider of Deca M-SeriesTM Adaptive Patterning Technology ® DOD Contract and Reshoring Initiative $120 million DOD contract, with an option for an additional $70 million to support semiconductor supply chain reshoring. SkyWa
Slide 13: 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 14: 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 15: 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 16: 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 17: 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 18: Select Partners & Customers
Select Partners & Customers 18 ©2023 SkyWater Technology. SkyWater Proprietary.
Slide 19: Synergistic Innovation: Open-Source Drives Exponential Growth in New Designs
Synergistic Innovation Open-Source Drives Exponential Growth in New Designs 19 ©2023 SkyWater Technology. SkyWater Proprietary.
Slide 20: Financial Summary
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Slide 21: Q3 Earnings Highlights
Q3 Earnings Highlights • Year-to-date revenues of $208 million, up 40% compared to the first nine months of 2022, are ahead of our long- term annual revenue growth objectives due to strong demand and improved operational execution for our Advanced Technology Services (ATS) business, which has also d
Slide 22: Q3 2023 Financial Progress
Q3 2023 Financial Progress • Continued Strong Financial Performance ◦ Unprecedented fifth straight quarter of sequential Revenue growth ▪ Year to date revenues of $208 million are up 40% year over year ◦ Five quarters of strong Gross Margins and positive Adjusted EBITDA ▪ Year to date Adjusted EBITD
Slide 23: Q3 2023 Financial Summary
Q3 2023 Financial Summary In USD millions Q3 23 Q3 22 Y/Y Q2 23 Q/Q Revenue • Strong progress toward our long-term annual growth targets ATS Revenue $57.1 $35.2 62% $53.0 8% • Total revenue +37% YoY and +3% QoQ ◦ ATS growth of 62% YoY reflects strong customer demand as well as Wafer Services Revenue
Slide 24: Five Quarters of Sequential Revenue Growth
Five Quarters of Sequential Revenue Growth First 9 months of 2023 Revenues up 40% Over Prior Year Period in USD $ millions +6% (3)% * Q4 2022 and Q2 2023 ATS amount excludes impact of modified customer contracts † Q1 2022 wafer services amount excludes impact of modified customer contracts Proprieta
Slide 25: ATS Revenue by Customer
ATS Revenue by Customer (each color band is a distinct customer) • ATS revenue totaled a record $57.1M in Q3 2023 ◦ 62% growth from Q3 2022 ◦ Tool sales were $3.2M in Q3 2023 and $0.2M in Q3 2022 • 10 largest ATS customers = ~80% of total ATS revenues in both 2022 and 2023 • Approximately 50 active
Slide 26: Improving Profitability and Cash Flow Metrics
Improving Profitability and Cash Flow Metrics in USD $ millions * Q4 2022 and Q2 2023 Net Loss and Adjusted EBITDA included $4.7M and $3.6M revenue events with no associated costs, respectively. Proprietary 26
Slide 27: 2023 Business Outlook
2023 Business Outlook • Achieving strong ATS growth this year, despite 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 RadHard – which is a key dr
Slide 28: 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 29: 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
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Slide 31: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation We provide supplemental, non-GAAP financial information that our management regularly evaluates to provide additional insight to investors as supplemental information to our results reported using U.S. generally accepted accounting principles (GAAP). We provide non-GA
Slide 32: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation We continuously evaluate the non-GAAP financial measures we use, the manner in which non-GAAP financial measures are calculated, and the adjustments we make to GAAP results to derive our non-GAAP financial measures. In the third quarter of 2023, we made the following
Slide 33: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q1 Q2 Q3 Q4 2021 Q1 Q2 Q3 Q4 2022 Q1 2023 Q2 2023 Q3 2023 GAAP 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 $ 71,624 GAAP cost of revenue $ 38,935 $ 39,377 $ 36,852 $ 55,156 $170,320 $ 49,061 $ 45,
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 Q3 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) $ (7,568) Equity-based compensation 235 6,768 3,394 2,
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 Q3 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) $ (7,568) Interest expense 1,058 912 733 839 3,542 1,029 1,
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 Q3 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) $ (7,568) Und
Slide 37: ©2023 SkyWater Technology. SkyWater Proprietary.
37 ©2023 SkyWater Technology. SkyWater Proprietary.
Slide 38: National Semiconductor Technology Centers to Drive Synergistic Innovation
National Semiconductor Technology Centers to Drive Synergistic Innovation 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 Domestically available R/D centers an
Slide 39: 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 40: 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
SkyWater Technology — 26th Annual Needham Growth Conference (January 2024) on 6ix