News briefing 

 

The US Space Exploration Corporation (Space X) will be deployed in 5G and 6G communication technologies in the future and will develop low-orbit satellites. Since Space X is particularly satisfied with Taiwan’s flexible and diverse industrial chain, the corporation will sign and conclude a Memorandum of Understanding (MOU) with the Ministry of Science and Technology and the communications, electronics, precision machinery, and other industries are expected to be involved in the Space X supply chain and, thus, experience favorable prospects. 

 

Impact analysis 

 

According to a report issued by the European consulting firm, Euroconsult, in August 2018, there will be a market worth US$22 billion for low-orbit satellite manufacturing and US$16 billion for satellite launch between 2018 and 2027, which will create an overall market of nearly US$38 billion in business opportunities. In addition, the business opportunities of satellite-related equipment to be re-manufactured every year is approximately US$4 billion, if the normal operation of the satellite system that will be launched is maintained during the above-mentioned period.

   
Taiwan’s output value for the satellite industry is mainly focused on the ground equipment, accounting for 87% of the total output value. Among the total value, the proportion of global manufacturing for GPS equipment is high, encouraging the IC design industry to develop GNSS-related chips. Furthermore, the proportion of value-added services (such as satellite TV operators, satellite image processing, and others) should amount to 12.7% for the manufacturing and 0.3% for the satellite launch. However, the sales regarding the manufacturing and satellite launch are considered to be fairly limited. 

 

Moreover, the satellite industry is important for demonstrating Taiwan manufacturers’ reliability and successful industry experience. Thus, satellite-related components suppliers or subsystem suppliers must pass all industry requirements and be cleared for the field verification of the space environment to obtain international recognition. In other words, if newcomers are unable to create their first flight experience, it becomes difficult for them to demonstrate their capabilities to foreign satellite manufacturers. Therefore, if a satellite system is built in a space center, it will help the domestic industry to gain verification experience of the space field while using domestic components/sub-systems. This will also help boost and nurture the momentum of the supply chain for the domestic satellite industry in the long run.

 

In the past, high-orbit satellites were limited to the service life (15 years) and a lack of orbital resources; the demand is, therefore, relatively small. Moreover, since each satellite requires longer research and developmental periods, it is impossible for the component/sub-system manufacturers to have continuous orders every year. As such, manufacturers are less willing to place more investments into satellites in general. Nevertheless, the current trend of the low-orbit satellites has escalated resulting in a "mass production” approach. Furthermore, if the service life were reduced to 5 years, this would help suppliers gain stable orders from users every year. Consequently, for the PCB manufacturers of Taiwan, the satellite market opportunity would create an emerging market that combines high gross margins with the mode of traditional mass production.