Down a long hallway inside the Skywater Technology complex in Bloomington, you’ll find a “clean room.”
More sanitary than a hospital surgical suite, it’s where this high-tech foundry makes hundreds of millions of computer chips a year.
“Computer chips are the workhorse of technology in automotive platforms, industrial control platforms, education systems,” explains Ross Miller, the company’s senior vice president of industrial and aerospace businesses.
Skywater Technology’s 1,700 employees — 700 in Bloomington, the rest in Texas and Florida — manufacture about 400,000 silicon wafers each year.
Computer-assisted programs etch layers of microscopic circuits onto each wafer, about the size of a pie plate, creating roughly 1,000 chips on each one.
We visited the facility the day after President Trump’s announcement to impose a 100% tariff on microprocessors made outside the United States.
“It’s a big deal,” Miller says. “I want to temper expectations a bit because the president has made some statements about the policy intent, but the details of that policy, we’re still working to get more information about.”
Right now, only about 12% of the world’s computer chip supply is made in the U.S.
That’s down from 37% in the 1990s, according to the Semiconductor Industry Association.
Miller thinks the tariffs could help jump-start chip manufacturing in Minnesota.
“The real takeaway is the recognition that semiconductors are a critical part of our supply chain, our industries, and really our part in national security overall,” he says.
It’s still not clear how the tariff will impact prices on products that use chips, like cell phones, cars, and computers.
But what about Minnesota’s chip industry?
“To a certain degree, we’re like the Silicon Valley of the Midwest when it comes to chips,” explains Dave Vang, a finance professor at the University of St. Thomas.
He says to look at the numbers.
The Department of Employment and Economic Development says there are now 150 semiconductor companies statewide, employing 10,700 people — a near 6.5% growth since 2020.
DEED says the average wage for those jobs is $90,950 a year
Still, Vang says the effects of a chip tariff are uncertain.
“Just because we have a 100% tariff right now, I’m not certain that tariffs [are] going to last long term,” he declares. “Short-term, I think it’s good for Minnesota companies that are in this field. Long-term, I wouldn’t expand the factories just yet.”
Vang says he doesn’t expect a jump in price for iPhones and other devices that use chips from overseas.
“I think a lot of companies that deal with this, they’re concerned about how big a market the U.S. is,” he explains. “They might be willing to eat into some of their profit margins to cover the cost.”
Miller says Skywater Technology is working to learn more about the effect of the tariff.
“We really do see that this is being effective in driving demand for more stateside manufacturing support,” he notes. “Also, with the signal that customers are not only going to build here but invest here.”