The satellite frontier: Taiwanese tech firms tackle challenges in expanding low-Earth orbit market

Allen Hsieh, Taipei; Vyra Wu, DIGITIMES Asia 0


In the dynamic world of international low-Earth orbit (LEO) satellite operations, major players are making significant moves, actively launching satellites and achieving breakthroughs. Amidst the LEO satellite boom, Taiwanese manufacturers are holding their ground.

Fueled by increased demand for ground equipment, Taiwanese businesses in the information and communication technology (ICT) sector, semiconductor industry, printed circuit board (PCB) manufacturing, and microwave-related fields are capitalizing on opportunities. However, despite a few component manufacturers seeing a boost in revenue, the shipment of complete systems, like antennas, hasn't experienced the expected surge. This raises the question of how Taiwanese manufacturers should approach the opportunities presented by the LEO satellite industry.

BWant, an antenna testing and certification (OTA) company, acknowledges Taiwan's strengths in certain aspects of LEO satellites, such as coatings and low-noise block downconverter (LBN). However, all companies face the challenge of insufficient order volumes, especially for complete systems like antennas, where international giants place relatively few orders.

While participating in the manufacturing of components is positive, business survival demands volume. The volume of LEO satellites, when compared to that of the mobile phone industry, still presents a significant gap.

Sources reveal that the collaboration between OneWeb and Taiwanese manufacturers falls short of providing substantial orders, as it is primarily focusing on testing. In the antenna sector, Taiwanese manufacturers lag behind, facing strong competition from South Korean giant Intellian and Chinese player Starwin. This gap is attributed to deeper investments by South Korea and China in defense and aerospace technologies.

Satellite operators place significant emphasis on the image and technical capabilities of their suppliers. Building trust is a challenge, with key considerations being which manufacturers have been used, under what conditions, and how many times. While technical specifications are essential, simply using them as selling points may not be sufficient to penetrate the international supply chain. As a result, international satellite operators currently favor antennas from South Korean and European manufacturers.

When it comes to the involvement of Taiwanese electronic heavyweights, apart from major players like Foxconn and Pegatron, the current level of participation is relatively superficial. Industry insiders attribute this to factors related to non-terrestrial networks (NTN), telecos, and international chipmakers. The extension of the ecosystem with the implementation of 4G and 5G may ultimately favor the involvement of larger players, but success remains uncertain. It is emphasized that relying solely on LEO satellites as a standalone business may not be sufficient. For instance, manufacturers developing array antennas should diversify into other related applications, with radar being one example.

Due to the relatively small size of the LEO satellite industry, it is more suitable for companies with a flatter organizational structure, allowing for closer collaboration between R&D and production. Larger enterprises participating in the satellite industry, like Qisda, can engage through investments in startups.

Currently, major Taiwanese companies investing in LEO satellites are doing so primarily due to potential customer demands. For instance, Amazon's Project Kuiper is set to ramp up production in 2024, prompting businesses closely associated with Amazon to accelerate research and development of LEO satellite-related products and attempt to enter its supply chain. Differences in production models are also observed, with a departure from the traditional approach of mass production without adjustments during the process. Instead, adjustments are made before production begins, especially considering the lower yield of millimeter-wave (mmWave) components used in satellites.

While Taiwanese manufacturers' involvement in LEO satellite components is still in the early stages, most have core businesses beyond LEO satellites that can sustain their operations. The opportunity in the LEO satellite market is inevitable, with the potential for new business growth through continuous innovation. It is undeniable that the LEO satellite industry is a long-term trend, but resilience is required to endure until the opportune moment arrives.