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Executives at SkyWater Technology Inc., the largest semiconductor maker in Minnesota, unveiled for investors a five-year plan for the company to reach the profitability levels of the chip industry's leaders.

But for the next year or so, they said profits will be constrained as SkyWater spends heavily on new production capacity, in part to overcome industry shortages.

Shares in SkyWater, which became a public company in March, plunged nearly 40% last week when it revealed a $56 million spending plan to boost the output at its factory near the Mall of America in Bloomington.

But the share price recovered much of that ground Wednesday when executives discussed the decision during a quarterly results conference call. SkyWater shares finished the day up 20% to $20.24.

Executives told analysts and investors that raising capacity now will lead to sustained sales growth and higher profit margins in coming years. In addition to the expansion in Bloomington, SkyWater will raise output at a small chip factory it took over in Osceola County, Fla., earlier this year.

"With both the expansion in Minnesota and Florida, we believe we can double our output collectively over the next 18 to 24 months," Tom Sonderman, the company's chief executive, said in a conference call with analysts to discuss quarterly results.

He and other executives said that some research and other initiatives that date back several years have reached the stage where they will soon deliver sales. As a result, SkyWater's bumpy revenue growth should become more consistent.

Executives said they are targeting long-term sales growth of 25% annually. They expect gross profit margins to range from 40% to 45% by 2025 or 2026. That level is not far below the gross profits seen at the industry's giant producers like Intel Corp.

In the second quarter ended June 30, SkyWater reported a net loss of $7 million, or 20 cents a share. The company had a loss of $5.3 million in the same period a year ago. Sales rose 34% to $41.2 million.

SkyWater executives declined to provide guidance for the rest of 2021, citing factors beyond the company's control. The chip industry is in a period of constrained output that is particularly acute, which has affected the availability of materials.

At SkyWater, two initiatives — to build chips that are hardened against radiation, useful for military and space purposes, and to make chips with advanced packaging materials — are currently weighing on profitability.

"There will be a drag on gross margin for 2021 until we start generating significant revenues from both of those businesses," said Steve Manko, the company's chief financial officer.