Everyone knows the classic phrase from Pixar’s Toy Story: “To infinity, and beyond!” While this is a line from a space ranger toy that has never stepped foot in space, this phrase actually speaks more to the long-existing human desire to discover places beyond our world. And finally, the possibility of space travel has stealthily caught up to us. In July of 2021, two renowned entrepreneurs Richard Branson, founder of Virgin Galactic, and Jeff Bezos, founder of Amazon, respectively embarked on their own journeys into space. With their successful trips as a backdrop, these events not only opened the possibility for space travel for ordinary people but also created something entirely new: the space industry.
Within the last 10 years, we’ve seen many developments that have set the stage for the space industry. The drastic drop in production costs of satellites, the overwhelming increase in the carrying capacity of rockets, and the decreasing cost of reusable rockets have gradually evolved the focus on space from competition among governments to the private sector. Currently, the hottest areas in the space industry include satellite communication, navigation, and planetary observation. However, as the space industry continues to grow, emerging areas such as space situational awareness (SSA) and space traffic management (STM) are expected to gain more attention. According to a Morgan Stanley report, the overall industry for space technology is projected to grow from today’s $370B USD to the trillions by 2040. And you can certainly bet that this massive market potential is making many investors excited to hop on this train. In fact, within the past 10 years, roughly 1,650 space startups received funding, with a collective value of $231B USD invested.
Among the numerous topics of space tech, one area that receives the most attention is satellite technology. This is because satellites are arguably the foundation for the emerging space industry since they are essential for any space-related operation. For example, Low Earth Orbit (LEO) satellites have been a hot topic because of their endless applications in internet-related services. Soon enough, self-driving cars, the Internet of Things, and other areas in the information-transmission industry will gradually benefit from the innovation in LEO satellites. Case in point, SpaceX’s renowned Starlink Project plans to utilize LEO satellites for their internet services. Quite similarly, Astranis, a California-based space-tech startup in Cherubic’s portfolio, is developing the next generation of smaller, cheaper geostationary satellites that will provide fast, reliable internet connectivity to residents in remote areas. In fact, Astranis is already planning to transport satellites in spring of next year using one of SpaceX’s rockets to provide better internet quality to remote areas of Alaska.
In the near future, internet connectivity will no longer be a privilege for those only in populous regions. This big of an opportunity has prompted governments around the world to begin planning budgets and legislation in preparation for such innovations. While the EU has already pledged about $17B USD to develop space tech in the next 6 years, South Korea, Japan and India have also begun preparing their own plans. In particular, South Korea, which most closely resembles Taiwan in terms of industry structures, has designated nearly $3.38B USD to send 8 geosynchronous satellites into space to establish their own satellite navigation system. In addition, South Korea recently launched their first “purely South Korean made” rocket on October 21st, allowing South Korea to become the 7th country in the world to independently develop and launch their own rockets.
Amidst rapid changes to the space industry, if Taiwan is able to successfully employ its rich experience in semiconductors, communications technology, and precision machinery into this emerging market, Taiwan can surely play a key role in the overall supply chain for space tech. Taiwan’s advantage precisely lies in its ability to utilize high-quality materials and manage production costs; all Taiwan has to do is show it the world. In addition, government stimulus is an important factor in realizing Taiwan’s potential. Historically, the Taiwan government was able to cultivate space tech capabilities through programs with its own National Space Organization. Going forward, Taiwan’s 3rd National Space Plan aims to utilize a 10-year budget of $25B NTD to make Taiwan a central destination for space tech research and manufacturing, especially in the satellite component supply chain. If Taiwan is able to execute these objectives, along with the support of the government, perhaps Taiwan can produce another success story much bigger than we all can imagine.
