Rising Penetration Rate of Satellite Services Drives Component Manufacturers into Satellite Supply Chains, Says TrendForce

Global Market Value Expected to Reach US$357 Billion by 2025

TrendForce’s latest report, “Key Drivers of Satellite Industry Development: Strategies and Challenges of Major LEO Satellite Suppliers,” reveals that the rising penetration rate of LEO satellite services is urging component manufacturers across the globe to integrate into the supply chains of Starlink and OneWeb. The global satellite market value is projected to grow from $283 billion in 2021 to $357 billion by 2025, at a CAGR of 2.6%.

TrendForce notes that Starlink currently employs a vertical integration strategy for its supply chain, producing and assembling key satellite components in its own factory in Washington, USA. These components include payload channel elements, Ka-band antenna elements, filters, and separators. By producing these key components in-house, Starlink effectively controls production conditions and reduces the complexity of supply chain management.

In contrast, OneWeb adopts a highly outsourced supply chain approach. It delegates the production of key satellite components to regional Tier 2 parts manufacturers. These components are then partially assembled by subsystem factories before being sent to OneWeb’s factory, OneWeb Satellite, for final assembly. This highly open supply chain model allows many component manufacturers to work with OneWeb and facilitates their entry into the LEO satellite market.

Taiwanese SME component manufacturers partner with open supply-chain satellite companies to enter the LEO satellite industry

TrendForce observes that large Taiwanese manufacturers integrating into Starlink’s supply chain tend to have more resources and structured systems, meeting Starlink’s stringent space testing requirements (e.g., random vibration tests, separation shock tests). However, smaller Taiwanese satellite component manufacturers find it challenging to integrate into Starlink’s supply chain due to limited resources.

Therefore, TrendForce anticipates that small and medium-sized Taiwanese satellite component manufacturers will seek to partner with satellite companies using open supply chain models—such as OneWeb—to enter the global LEO satellite industry. Currently, through government project plans and field verification models, opportunities for collaboration between OneWeb and Taiwanese key component manufacturers are being promoted. Notably, with the support of LEO satellite projects, Taiwanese satellite component manufacturers can mitigate the risks of entering emerging markets, gain initial insights into target market acceptance of LEO satellite services, and determine the extent of future resource investments.