WASHINGTON – Two European satellite manufacturers said companies need to work more closely together to compete with vertically integrated competitors like SpaceX.
“We have to break some barriers and work more as a team by openly merging or forming joint ventures to share the risk,” Benoit Deper, Aerospacelab CEO and founder, said March 12 at the Satellite 2025 conference. “If we keep this siloed approach, we know where it goes. We did it with launches, and the launch ecosystem collapsed.”
SpaceX dominates the global launch market by offering frequent and inexpensive access to orbit on rideshare flights. If satellite manufacturers don’t find ways to compete more effectively, they may cede their market to SpaceX as well.
“In the current environment, facing those vertically integrated players, the only way to proceed for the rest of the industry is to emulate vertically integrated organizations through co-engineering between the operator and the supplier to foster innovation and extract as much value as possible,” said Thales Alenia Space CEO Hervé Derrey. “This is not possible through classical vendor-supplier-customer relationships.”
Starshield
Rapid production of communications satellites has helped SpaceX populate its Starlink constellation, which now includes roughly 7,000 operational spacecraft in low-Earth orbit. With an ongoing production line, SpaceX can offer government customers speedy delivery of technologically advanced spacecraft at attractive prices. The Defense Department purchased more than 100 Starshield satellites, a military version of Starlink with enhanced encryption and other security features.
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SpaceX’s “extreme vertical integration” is difficult for individual companies to challenge, Deper said.
Satellite manufacturers already are moving toward consolidation. Airbus, for example, is talking with Thales Alenia Space and Leonardo about combining their satellite businesses.
Supply Chain
At the same time, satellite manufacturers are working closely with suppliers to minimize supply-chain bottlenecks.
“Having good relationships with your suppliers is so important,” said Debra Facktor, head of Space Systems for Airbus U.S. Space and Defense. “We’re relying on them to do what they do best and to invest in their technologies.”
Manufacturers are also scrutinizing the ability of suppliers to increase production.
“Good quality, good price and the ability to scale is now the new criteria when you’re picking suppliers,” said MDA Space CEO Mike Greenley. “We find ourselves in situations where we’re making additional investments in suppliers to ensure they can scale or deciding if we have to bring certain elements inside because it’s not going to be able to scale.”