The case for domestic manufacturing of semiconductors “has never been stronger,” which means SkyWater Technology will continue to grow, the company’s CEO said.

Tom Sonderman said he outlined his case in an open letter in mid-March to reassure SkyWater’s employees and stakeholders as the company continues to negotiate a $1.8 billion deal to be acquired by IonQ.

“The CEO letter was an opportunity to kind of reinforce that business-as-usual message,” Sonderman said in an interview.

Business as usual means growth. As the U.S. has emphasized growth of domestic manufacturing — and Congress passed the CHIPS and Science Act in 2022 — companies have grown faster than the overall economy.

In Minnesota, Bloomington-based SkyWater is one of about 150 semiconductor operations making up one of the fastest-growing sectors in the state. The sector grew 11.4% from 2021 to 2025, according to the Minnesota Department of Employment and Economic Development.

Its 10,100 workers also make about $97,000 a year, more than 25% higher than the average annual wage in Minnesota, DEED said.

The federal government, through CHIPS and the Department of Defense, has helped fund hundreds of millions of dollars in improvements at SkyWater.

Polar Semiconductor, which like SkyWater traces its roots back to Control Data Corp., also has expanded. Already the largest semiconductor facility in the state, the Bloomington company owned by private equity groups Niobrara Capital and Prysm Capital in 2024 announced a $525 million expansion backed by $195 million in state and federal funding.

SkyWater’s deal with IonQ, which is expected to be closed in the second or third fiscal quarter, should give the company a needed investment boost for its shift to quantum computing. And SkyWater fills a hole in IonQ’s conception-to-manufacturing pipeline for quantum chips.

Sonderman said that under the deal, SkyWater would continue to operate as an independent subsidiary, not integrated into Maryland-based IonQ’s existing operations. IonQ has largely been built through 10 deals since the start of 2025, plus separate partnerships.

That means SkyWater’s growth plan, enhanced by purchasing the Fab 25 foundry in Texas, will continue as planned.

“What we are going to do is treat IonQ like with any trusted program," Sonderman said. “It will be completely compartmentalized and essentially run independently of the rest of the business.”

Increasingly, the chips that SkyWater is building will be used as the framework for quantum computers, the next generation of computing that promises to deliver even more computing power and efficiency from even the more complicated chips of today.

IonQ is setting milestones in quantum computer development, and SkyWater is currently working with eight quantum computing companies, some of which they’ve named such as D-Wave Quantum, PsiQuantum and QuamCore, and other big players in the space that they have not named.

Broad use of quantum computing is getting closer to reality.

“There’s a broad theme in the quantum market of beginning to think about lab to fab to market,” said Ross Miller, chief strategy officer of SkyWater Technology.

Troy Jensen, an analyst with Cantor Fitzgerald, said at a question-and-answer with IonQ’s CEO that he’s a “big believer too [that] within the next couple of years we will see applications and problems getting solved with quantum, maybe hybrid networks.”

Niccolo de Masi, IonQ’s chief executive, said the SkyWater deal will make the joint company “the best capitalized and largest quantum merchant supplier in the world.”

“SkyWater helps us build an IonQ platform that customers — especially government and other mission-driven buyers — can trust and plan around irrespective of geopolitics,” de Masi said.

The U.S. is continuing to repatriate some of the semiconductor manufacturing that has over decades largely migrated overseas. According to the Semiconductor Industry Association (SIA), America’s share of global chip manufacturing capacity whittled 37% in 1990 to 10% by 2022.

That decrease has become a national security issue because the U.S. must rely on other companies for key components.

“You need to think through and understand your supply chains and then derisk them,” said Scott Martens, who teaches operations and supply chain management at the University of St. Thomas’ Opus College of Business and is a former Naval officer. “There is certain stuff that you want to have capability and capacity of in the U.S.”

While not everything needs to be built here, backup plans are needed and “we have to have a base and a base that we can expand and build on,” Martens said.

The consulting firm McKinsey & Co. estimates the global semiconductor industry is expected to grow from the $775 billion in 2024 to over $1.6 trillion by 2030 thanks to the expansion of artificial intelligence and the growth of data centers.

According to the SIA, since 2020 U.S. based semiconductor companies have announced over 140 projects totaling more than $640 billion. And so far the Department of Commerce has made over $40 billion in grants and loans to 35 companies, including SkyWater and Polar, for domestic semiconductor projects mostly from the CHIPS and Science Act.

IonQ and SkyWater wants to avoid repeating the pattern that the U.S. laid down with semiconductor technology and keep the development of quantum computing growing in the United States.

“The U.S. doesn’t want that to happen with quantum,” Sonderman said in an interview.

Much like Taiwan Semiconductor Manufacturing Company has become the go-to company for AI chip development and manufacturing. Sonderman would like nothing more than IonQ and SkyWater to develop into a premium source for quantum chips.

With its Fab 25 acquisition, SkyWater became the largest pure-play foundry in the country. Intel is still the largest manufacturer, but it only makes its own brand.

SkyWater now employs 1,551 workers, up from 702 at the end of 2024. And the $93 million Fab 25 acquisition added $175 million in revenue to SkyWater’s $442 million total. Sonderman said he “conservatively” estimates that SkyWater will grow to $600 million in sales this year.

Quantum computing with its ability to solve complex problems more efficiently than traditional high-performance computing is a new arms race, though. Countries are investing billions of dollars to advance quantum computing. A tenet of China’s next five-year plan includes industrial applications for artificial intelligence but also advancements in quantum computing.

Sonderman in his letter said SkyWater’s growth projectory will help it stay a leader in the sector and that the company’s work remains vital.

“Semiconductors are the new steel. America’s strength — in defense, infrastructure, industry, and daily life — depends on silicon, which forms the backbone of our most critical systems," Sonderman wrote.

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