Following the Ukraine war, global attention shifted towards the advancement of low earth orbit (LEO) satellite communication technology, igniting opportunities across the satellite market. When considering Taiwan's role and strategic positioning amidst the LEO satellite surge, the director general of Taiwan Space Agency (TASA), Dr. Wu Jong-Shinn, emphasized two driving forces. Firstly, government investments in infrastructure and the knowledge gained from launching the Formosat satellite series into space played a pivotal role. Secondly, the transformation of businesses from pure manufacturing to gaining system integration knowhow became imperative for maximizing profitability.
Wu stressed the paramount importance of system integration capability, remarking that systems could either be self-developed or procured from external sources. A major challenge is that even though Taiwanese manufacturers can meet certain specs, they fail to understand the rationale and applications giving rise to these specs.
To compete with international satellite giants, Taiwanese manufacturers needed to grasp satellite systems comprehensively. Furthermore, they should carve their own niche in satellite services to evolve beyond mere manufacturing and capitalize on opportunities within the flourishing global LEO satellite industry.
Using Oneweb as an illustrative case, initial investments hailed from the UK and India, later joined by South Korean firm Hanwha, which subcontracted the production of Oneweb's very-small-aperture terminal (VSAT). A closer examination reveals that Taiwanese companies contributed to some of the components. Presently, Taiwanese manufacturers occupy a relatively lower position in the industry hierarchy.
Wu forthrightly expressed his disappointment in this regard. Despite several Taiwanese supply chain companies successfully entering the international LEO satellite industry, including those within SpaceX and Oneweb's supply chains, emphasizing the need for Taiwan to establish its unique application prospects instead of merely adhering to the specifications set by others. An analysis of the distribution of total value within the LEO satellite industry indicates that manufacturing is not the most lucrative sector.
Global satellite market by segment
Source: Satellite Industry Association
Satellite ground equipment manufacturing constitutes roughly 48% of the satellite industry's value, while satellite services contribute about 45%. Satellite launch services account for approximately 2%, and satellite manufacturing comprises roughly 5%. Despite the competitive edge of Taiwanese manufacturers in satellite ground equipment manufacturing, they face formidable competition from numerous counterparts.
Reflecting on the evolution of satellite communications (SATCOM), recent global attention has focused on LEO satellites as a component of satellite communication. Initially, satellite communication relied on geosynchronous orbit (GEO) satellites utilizing wide-beam communication. Subsequently, the transition to GEO satellites using spot beams improved communication service reliability, albeit with a residual delay of 0.5 to 0.8 seconds.
However, the adoption of LEO satellite communication significantly reduced latency to a mere 10 to 20 milliseconds. Nonetheless, this shift necessitated the launch of a substantial number of satellites, leading to increased launch costs. Wu highlighted that this increase in demand for LEO satellites compared to synchronous orbit or MEO satellites also presented a significant opportunity. LEO satellites have a lifespan of approximately 3 to 5 years, generating a sustained demand for satellite manufacturing in the LEO satellite supply chain, a realm currently being entered by Taiwanese companies.
To address the gap in Taiwan's space industry chain concerning space transportation, Dr. Wu Jong-Shinn disclosed that TASA would initiate a rocket program in 2023. Significantly, Tamkang University successfully launched the second scientific research rocket, "Jessie" in southern Taiwan on September 11th. The National Science and Technology Council expressed its anticipation that TASA-supported scientific research rocket development programs would nurture more space talents and propel the development of space technology in Taiwan.
Article translated by Vyra Wu
