07:52 AM EST, 12/06/2024 (MT Newswires) -- SkyWater Technology ( SKYT ) said Friday it signed a preliminary memorandum of terms for up to $16 million in funding from the US Department of Commerce CHIPS for America program

The financing would provide federal incentives to improve production capabilities at SkyWater's ( SKYT ) Minnesota facility for the aerospace, defense, biomedical, industrial, thermal imaging, and quantum computing markets, the semiconductor company said.

The company said the proposed $16 million CHIPS award will be combined with $19 million from the State of Minnesota's Forward Fund as well as customer-funded co-investments of $320 million through 2026.

The company said it plans to use the funds, along with tax credits, to increase its U.S.-based 200 millimeter semiconductor technology development and production capacity by 30%, to modernize its facility, speed technology development, and accelerate time to market for customers.