IonQ Inc. (IONQ) shares traded higher Tuesday after the quantum computing company announced it's buying U.S. chip manufacturer SkyWater Technology Inc. (SKYT) in an approximately $1.8 billion deal. The acquisition, announced Monday, is all about bringing chip production in-house and speeding up the notoriously slow process of building quantum computing hardware.

How the Deal Works

IonQ agreed to pay $35 per share for SkyWater. The structure splits the payment into $15 cash and $20 worth of IonQ stock per share. When the deal closes, SkyWater shareholders will own between 4.8% and 6.7% of the combined company.

IonQ had $1.5 billion in cash and equivalents sitting on its balance sheet as of September 30, so the company has the financial firepower to get this done. The transaction is expected to close sometime in the second or third quarter of 2026, pending shareholder and regulatory approvals.

After the deal closes, SkyWater will continue operating under its current name as a wholly owned subsidiary. CEO Thomas Sonderman will keep running the unit and report to IonQ Chairman and CEO Niccolo de Masi.

Why This Matters

The whole point here is vertical integration. Building quantum computers requires extremely specialized chips, and outsourcing that production creates delays and costs. By owning the chip manufacturer, IonQ aims to reduce production timelines and costs while controlling more of its supply chain.

JPMorgan analyst Peter Peng maintained a Neutral rating with a $47 price target on Monday, calling the strategic rationale solid. "We believe the strategic rationale is sound, as the deal accelerates IonQ's technology and product roadmap, provides strong vertical integration for its full-stack quantum platform, and enhances cost advantages," Peng wrote.

The big headline from Peng's analysis: the acquisition could slash the 256-qubit chip cycle time from nine months down to just two months. That's a massive acceleration for a company racing to scale quantum computing technology.

There's also a defense angle. SkyWater Technology holds DMEA Category 1 trusted accreditation, which should strengthen IonQ's position in government and defense markets.

IonQ also pre-announced that its full-year 2025 revenue came in at the high end or above its previously announced guidance range of $106 million to $110 million.

IONQ Price Action: IonQ shares were up 3.06% at $44.69 at the time of publication on Tuesday.