Osceola Commissioners voted unanimously on Monday to begin formal negotiations with Minnesota-based SkyWater Technology Foundry to replace the University of Central Florida as the funding and management partner for the Center for NeoVation.
“SkyWater is well-suited to replace UCF’s role within BRIDG and the Center for NeoVation. They understand the specialized capabilities of the facility and have the resources to make the best use of our existing investment,” Osceola Commission Chairwoman Viviana Janer said. “We are excited by the potential of this new partnership and what it will contribute to our overall vision for NeoCity to transform our economy with high-paying technology jobs.”
SkyWater has been a strategic partner with BRIDG, the non-profit operator of the advanced manufacturing facility in NeoCity. The company already has a Memorandum of Understanding (MOU) with Osceola County to assume the university’s former management role and assume the remainder of its 40-year lease at facility. The company has pledged operate the facility at full capacity, which could mean creating at least 220 jobs within five years. Former BRIDG employees who were laid off earlier this summer would be given the opportunity to interview for new positions.
“The Florida facility has so much growth potential, we believe it will be very easy to expand its employment base,” SkyWater Chief Technology Officer Brad Ferguson said. “As we work to fully resume operations, we will need to hire employees in a variety of disciplines including engineering, operations, maintenance, facilities, sales and business development.”
County Manager Don Fisher said the county negotiated with seven different companies during its search to replace the university as the anchor of the Center for NeoVation and funding partner for BRIDG. SkyWater acknowledges that it would also have to replace to the $50-60 million in funding from the university for operations and capital expenses. “So we’re just really looking for an acknowledgement from whoever we negotiated with that some investments on your end is going to be necessary. And they recognize that,” Fisher said.
Ferguson told GrowthSpotter the firm’s first priority would be to restore the facility to its full operational levels so they can resume work on existing BRIDG government contracts that are worth millions of dollars. BRIDG Acting CEO Brian Sapp said the existing relationship with SkyWater will help make the transition seamless.
“We want to be able to hit the ground running,” Sapp said. “There’s a real synergy between BRIDG as a nonprofit and SkyWater as a commercial foundry. Together, we’ll be able to provide some unique capabilities, and together we’ll be stronger.”
Those contracts will lay the foundation for their plans to make the Center for NeoVation an epicenter in the growing field of advanced packaging. Advanced packaging is a collection of approaches for combining chips into packaging, resulting in lower power, lower cost and improved performance. Advanced packaging is a growing field where product developers are innovating to enhance performance of chips by optimizing design of the products together with the packaging they’re going into.
“Part of our plan is to work with the U.S. Government to secure the planned National Manufacturing Institute (NMI) for Advanced packaging to make this facility the nexus for developing U.S. dominance in advanced packaging,” Ferguson said. “We also plan to bring in other expertise to accelerate the site’s advanced packaging capabilities and growth.”
Based in Bloomington, Minnesota, SkyWater is just three years old, but it’s the only U.S.-owned microchip manufacturer to earn accreditation from the Department of Defense as trusted foundry supplier. That status helped the newly formed company land a $170 million multi-year investment from DoD in 2019 to develop and manufacture specialized microelectronics for the defense and aerospace industry.
With the $80 million DoD cash infusion for phase 1, SkyWater is currently expanding its Bloomington facility by 60,000 square feet, including 15,000 square feet of new clean room space designed specifically to produce “radiation hardened” chips that can withstand extreme conditions, such as combat and space. The company began installing the equipment and tools to fulfill the contract in early September and expects to be up and running in 2021.
By opening a second facility at NeoCity, SkyWater gains access to an additional 60,000 square feet of clean room space with the tooling in place to build the same 200mm chips it currently produces in Bloomington.
“As far as supplemental work for the DOD – we have already identified several areas where we think there are existing programs in Minnesota that can be nicely supplemented by the capabilities in the Florida facility,” Ferguson said. “We see this facility as not just a place for R&D, but also for production, which creates an opportunity to instantiate our Technology Foundry Business model as a way to create a viable and growing business.”
SkyWater was founded in 2017 with backing from private equity company, Oxbow Industries. The company paid $30 million to buy the chip manufacturing site that was previously owned by Cypress Semiconductor Corp. in Bloomington. At launch, SkyWater had 400 employees. In its first three years, the company has added 70 new jobs and more than doubled its revenue by diversifying its customer base, Ferguson said.
The company is poised to maintain, and even accelerate its pace of growth because it is uniquely positioned to compete for even more federal contracts over the next decade through the CHIPS for America Act and American Foundries Act. Specifically, SkyWater is targeting the $5 billion allocated for the NMI for Advanced Packaging.
“Even though the minimum requirement in those bills is domestic location, not ownership, we have found with our customer base that U.S. ownership has resonated as an important factor because as a U.S. entity it’s easier for us to implement security measures that are important to the government,” Ferguson said. “Additionally, U.S. ownership keeps profit dollars onshore, which serves to amplify the economic benefits.”
Sapp said the partnership with SkyWater will be critical for Osceola County to realize its vision for NeoCity. “I do expect this will be a catalyst to attracting new industries to NeoCity and a catalyst for high-tech job growth in the region,” he said.
Orlando Economic Partnership COO Crystal Sircy echoed those thoughts, noting that these are the types of jobs that have fared well during the pandemic. Osceola County has the highest unemployment rate of any county in Florida.
“Right now the average wage in Osceola County is $36,415,” she said. “The average wage in the semiconductor manufacturing industry is $86,900 — so you can see the potential impact not only for those who would be employed, but for those who would supply goods and services both to the facility and to its employees.”