Commentary: Will Taiwan satellite industry ever take off?

Bryan Chuang, Taipei; Willis Ke, DIGITIMES Asia 0

Taiwan's first indigenously produced Earth observation satellite Formosat-5 was successfully launched August 25 from California, the US, into a low Earth orbit, about 720 kilometers high, and will undergo one month of testing before starting a five-year observation mission to collect data and images for natural disaster evaluation, national security and environmental monitoring. This marks a new milestone in Taiwan's space technology development, announcing to the world its entry into the space satellite industry.

Formosat-5 is Taiwan's first ultra-high resolution remote observation satellite designed, manufactured, assembled and tested domestically, shedding dawning gleams to the nation's space industry. In addition, the satellite was carried into the Earth orbit by Space X's Falcon 9 rocket, indicating the advent of the "Space 2.0" era, with the global aerospace field, once dominated by NASA of the US, the EU and Russia, is gradually opening up for commercial operations by other countries in the world.

Over the past four decades, Taiwan has had many well-developed industries, but some of them have become stagnant or started falling following years of prosperity. Some newly emerging industries are struggling to survive intense price-cutting competition from counterparts in China. Some other industries with high entry thresholds are enjoying booming orders from customers, but they are plagued by shortages in the supply of water, electricity and talent.

Sound attitude toward innovative industries required

Accordingly, it is not impossible for Taiwan to develop space satellite as a new industry and pursue commercial innovations in the sector, but what really matter are: whether satellite-related companies will still exist 10-20 years from now and whether the value of the industry will increase or decrease progressively? The Taiwan government is actively encouraging industrial upgrades and innovation startups with a series of fostering programs, but the key point rests with if the government and private sectors have developed a sound attitude toward the development of innovative industries. Taiwan could continue to introduce innovative product ideas from the Silicon Valley for trial or mass production by taking advantage of its manufacturing capability and lower production cost, but that would only be a repeat of what Taiwan has been doing, which is neither a "disruptive" innovation nor a new commercial mode that the country should be looking for. Taiwan would only be continue earning from the "hard labor" without creating new value or future value. If Taiwan makers cannot move to create their own values and increase profit margins, then the government efforts would eventually amount to nothing.

The government has spent NT$5.7 billion (US$188.95 million) on the design, production, delivery, launch and insurance of the 450kg Formosat-5 satellite. And Cheng Liang-gee, Taiwan's minister of science and technology, said that the government will expand its budget to support more aerospace-related projects, such as nurturing the space industry and developing new satellites and technologies. It seems satellite design talent at government-funded research organizations may not have to worry about their jobs. But the problem is that Chen will not always stay on his post, and the government is also unlikely to keep rendering budgets to support the R&D on space satellites. It means such satellite design talent should seek to set up startups or join private enterprises to explore new business opportunities associated with space satellites.

Based on related studies, satellite technologies will be widely applied in many areas, including telecommunications, homeland security, autonomous driving and other commercial activities, in addition to the military field, with these applications likely to flourish in the next 20-30 years. Taiwan now boasts very good academic performance in artificial intelligence (AI), but it counts more for these academic achievements to be industrialized and commercialized for maximum economic benefits. Likewise, both the Ministry of Science and Technology and the Ministry of Economic Affairs, should move to work out policy analyses on the space and satellite industries, introduce strategies to nurture new development teams and startups, and help private enterprises find proper positioning in the sectors, so as to make space and satellite become newly emerging industries with great development potentials and niche markets over the next 20-30 years, eventually winning Taiwan a solid presence in global space and satellite sectors.