The craze for Low Earth Orbit (LEO) satellites began in early 2022 with the start of the Ukraine-Russia war. Recently, driven by international satellite operators, an international supply chain similar to the mobile phone and laptop industry has taken shape. Observing the current number of satellites launched by the four major operators, most have a significant gap compared to their planned targets, except for OneWeb.
Meanwhile, SpaceX's Starship under development is larger in scale, has a higher payload capacity, and can carry more satellites in a single launch. With its recyclable features, it is expected to further reduce rocket launch costs, accelerating the global development of the LEO satellite industry. Industry experts optimistically anticipate a test launch in the first quarter of 2024 and obtaining official permits.
In this context, the Taiwanese PCB industry plays a crucial role in the satellite sector. According to industry representatives, the PCBs used by LEO satellites fall into the ultra-high-frequency range, and can't be sourced from China. Additionally, high reliability is required, which is an advantage held by Taiwanese PCB manufacturers.
Furthermore, the PCB production processes used in LEO satellites involve a hybrid of high-density interconnect (HDI) and traditional PCBs, requiring a high degree of customization. Leading HDI manufacturer Compeq is one of those highly regarded players in the market, with LEO satellites currently contributing to 7-10% of its overall revenue, expected to grow to over 10% by 2024.
Compeq, citing the increased demand associated with the direct-to-cell feature of SpaceX's Starlink, in addition to the successful launch of two prototype satellites for Amazon's Project Kuiper, noted that the LEO satellite broadband internet market is estimated to reach billions of dollars within the next decade.
The discussion on LEO satellites and their impact on the industry dates back four years, but at that time, the benefits for manufacturers or the industry were not significant. Although the overall LEO industry is still in its early stages, with Starlink already providing commercial services in 29 countries and the planned constellation of the four major operators gradually expanding, even though operational risks persist, it seems to have passed a highly uncertain period.
As the industry scales up, more manufacturers are expected to participate. The market anticipates that the LEO PCB production value will further increase in 2024-2025, with an estimated average annual growth of over 30%.
In terms of the PCB industry, LEO satellites represent a new application. However, Taiwanese manufacturers have a competitive advantage. After years of cultivation and effort, with significantly increased market visibility for related products, manufacturers are more willing to invest in the development of relevant products.
