It has become boom time for satellite manufacturers
- April 1, 2023: Vol. 10, Number 4

It has become boom time for satellite manufacturers

by McAlinden Research Partners

Satellite industry pure-plays such as Maxar, BlackSky and Planet Labs earned billions of dollars’ of contracts in 2022, spread out over the next decade, and new deals have continued to roll in this year. That has helped to boost the financial positioning of these smaller firms as they work to compete with defense industry mainstays like Raytheon, Northrop Grumman and L3 Harris.

Satellites’ utility to the defense industry appears to have grown significantly in the past few months, based on the volume of contracts and projects the Department of Defense has been rolling out.

News broke in February that the U.S. Space Force was implementing a new plan to broaden its pool of national security launch providers for the first time to small launch companies that can send satellites only to low and medium Earth orbits. That opens the door to increased competition for billions of dollars in contracts between fiscal 2025 and 2034, some of which could mirror the long-term mega-deals struck between the government and several private satellite companies during 2022.

Satellite imagery is playing a key role in the U.S. military’s monitoring of Russia’s attack on Ukraine. Government agencies and media sources alike have been bombarding satellite companies for photographs, 3D mapping, and other data, prompting the companies to expedite the expansion of their constellations. This was referred to as geospatial intelligence’s “internet moment” by Bill Rozier, the vice president of marketing at publicly traded satellite imagery provider BlackSky.

Just about a month later, on May 25, the U.S. National Reconnaissance Office announced it would be funding three companies — Maxar Technologies, BlackSky and Planet Labs —with billions of dollars in defense contracts throughout the next decade as part of its Electro-Optical Commercial Layer program.

Many of the larger U.S. defense contractors are getting in on the boom as well.

Earlier this month, Raytheon Technologies announced it has been awarded a contract worth more than $250 million from the Space Development Agency to build seven missile warning/tracking satellites. The new satellites will be integrated into the agency’s first operationally capable set of low-Earth orbit satellites, which will form tranche 1 of its ongoing Tracking Layer project. The Tracking Layer will provide limited global indications, warning and tracking of conventional and advanced missile threats, including hypersonic missile systems. Generating a defense against hypersonic missiles has become particularly critical for the United States, given Russia’s demonstrated capability to deploy them in a battlefield setting. In addition to Raytheon’s seven satellites, the Tracking Layer’s Tranche 1 will be composed of 14 made by Northrop Grumman and 14 made by L3Harris. Per Breaking Defense, those contracts have a combined value of $1.3 billion.

The injection of high-tech satellites into global conflicts will spur demand for satellite defenses as well. Boeing is now in the process of developing a ground-based system that can protect communication satellites from signal jamming. The technology is known as the U.S. Space Force’s Protected Tactical Enterprise Services ground system and is envisioned to be operational by 2024. The Space Force plans to spend more than $600 million on that system through 2027, in addition to $383 million already awarded to Boeing in relation to the system, as well as another $1.8 billion to develop a satellite constellation called Protected Tactical SATCOM, which will provide secure communications for military users.


This story was excerpted from an article reported and written by McAlinden Research Partners, which can be assessed here:


Forgot your username or password?