Government Funding Reliance: SkyWater Technology Inc. relies significantly on U.S. government contracts and initiatives, such as the CHIPS Act, for research and development funding, capital expenditures, and strategic direction. A reduction in government spending, shifts in policy, or a failure to secure future contracts could materially impact their financial performance and growth plans.

Capital Intensity Challenges: Operating a semiconductor foundry is highly capital-intensive, requiring substantial and ongoing investments in advanced equipment, facility upgrades, and process technology development. Failure to secure adequate funding for these capital expenditures could limit their ability to expand capacity, maintain competitiveness, or develop new capabilities.

Competitive Market Pressure: SKYT operates in a highly competitive global market against larger, more established semiconductor foundries and integrated device manufacturers. These competitors often have greater financial resources, broader technology portfolios, and longer customer relationships, potentially leading to pricing pressure and challenges in securing new business opportunities.