Satellite component manufacturers are looking for new business opportunities in the satellite market that is forecast to reach $357 billion by 2025.
Satellite market
The satellite market is forecasted to grow from $283 billion in 2021 to $357 billion by 2025, reflecting a compound annual growth rate (CAGR) of 2.6 percent, according to the latest report by TrendForce.
The adoption of Low Earth Orbit (LEO) satellite services is prompting component manufacturers to integrate into the supply chains of industry leaders Starlink and OneWeb.
Starlink employs a vertical integration strategy, manufacturing and assembling key satellite components in its Washington, USA facility. These components include payload channel elements, Ka-band antenna elements, filters, and separators. This approach allows Starlink to maintain control over production conditions and streamline supply chain management.
OneWeb utilizes a highly outsourced supply chain model. It outsources the production of key satellite components to regional Tier 2 manufacturers. These components are partially assembled by subsystem factories before final assembly at OneWeb Satellite. This open supply chain model facilitates collaboration with numerous component manufacturers, easing their entry into the LEO satellite market.
LEO satellites
Elon Musk’s SpaceX has launched its Starlink Internet services in Indonesia, marking the pivotal role of low Earth orbit (LEO) satellites in enhancing communication.
“LEO satellites are rapidly becoming essential infrastructure,” Kiran Raj, Practice Head of Disruptive Tech at GlobalData, in its research report.
“This transformation encourages innovation and strengthens economic resilience across industries, including aerospace and defense, telecom, agriculture, and oil and gas. Integrating LEO networks into these sectors enhances efficiency and productivity,” Kiran Raj said.
Technological advancements
Several significant partnerships and advancements have recently propelled the development of LEO satellite networks:
March 2024: US-based companies Viasat and Rocket Lab partnered to demonstrate on-demand, low-latency data relay services for LEO satellites.
March 2024: US-based Telesat and ThinKom Solutions expanded their partnership to certify ThinKom’s ThinAir Ka2517 antenna for the Telesat Lightspeed LEO satellite network, enhancing real-time data applications.
January 2024: John Deere, a US-based company, selected SpaceX’s Starlink LEO satellite network to supplement LTE coverage, boosting efficiency for farmers using its connected and autonomous farm machinery.
June 2023: US-based Momentum partnered with France-based Eutelsat and UK-based OneWeb to provide LEO satellite communications services for the oil and gas industry.
Challenges in LEO satellite industry
Despite the promising advancements, the LEO satellite industry faces several challenges, including space debris management, frequency interference, and regulatory compliance. Ongoing collaborations to merge satellite fleets are crucial steps towards addressing these issues, ensuring more efficient use of orbital space and improved service reliability.
Peter Chahal, research director for Telecommunications at IDC, said: “The right alliances with satellite operators will be critical for communications SPs to support their growth plans for ubiquitous satellite-to-cellular coverage and 5G wireless data and broadband services.”
Satellite parts and components
The satellite parts and components market size is estimated to reach $389.69 billion by 2029 from $244.93 billion in 2024, growing at a CAGR of 9.73 percent during the forecast period (2024-2029), according to Mordor Intelligence report.
Taiwanese manufacturers aiming to integrate into Starlink’s supply chain are typically well-resourced and structured, meeting stringent space testing requirements such as random vibration and separation shock tests. However, smaller Taiwanese satellite component manufacturers face challenges due to limited resources.
TrendForce predicts that small and medium-sized Taiwanese manufacturers will likely partner with satellite companies that adopt open supply chain models, like OneWeb, to gain a foothold in the global LEO satellite industry. Government project plans and field verification models are fostering collaboration between OneWeb and Taiwanese key component manufacturers.
This strategic alignment with LEO satellite projects allows Taiwanese manufacturers to mitigate entry risks into emerging markets, gain preliminary insights into market acceptance of LEO satellite services, and assess future investment levels.
Baburajan Kizhakedath
