Preface:

A recent research report by Goldman Sachs has garnered significant attention within the capital markets and aerospace technology sectors.

The report highlights that the global Low Earth Orbit (LEO) satellite market is projected to experience a sevenfold increase in size over the next five years.

This assertion not only presents investors with fresh opportunities but also signals the dawn of a new industrial era.

Author | Fang Wensan

Image Source | Online

Goldman Sachs Prediction: Basis and Market Potential

Advancements in rocket launch technology and a decline in satellite manufacturing costs have made the deployment of LEO satellite constellations more feasible. Over the past decade, the cost of manufacturing a single satellite has fallen by roughly 50%, while launch costs have decreased by approximately 70%. This substantial cost reduction has laid a solid foundation for the LEO satellite market's explosive growth.

Furthermore, the global demand for high-speed and stable internet access continues to rise, particularly in remote areas and developing countries where terrestrial communication network coverage is insufficient.

LEO satellites, with their low latency and extensive coverage, have emerged as the optimal solution to this challenge.

Goldman Sachs predicts that by 2030, the potential user base for global LEO satellite internet services will reach 1 billion, with a market size exceeding USD 50 billion.

Communication Application Scenarios: Building a Globally Seamless Network

Approximately 31% of the global population still lacks internet access. LEO satellites, with their unique advantages, are playing a pivotal role in bridging this digital divide.

For instance, SpaceX's Starlink already provides coverage in multiple African countries, enabling individuals in remote areas to enjoy the conveniences of the internet.

Moreover, LEO satellites can seamlessly integrate with terrestrial 4G and 5G networks, offering continuous services to people on the move and stable communication in areas like oceans and mountains where it is difficult for communication operators to deploy base stations.

In the future, LEO satellite communications are anticipated to closely integrate with 6G networks, constructing an integrated space-air-ground communication system to achieve truly global seamless coverage.

Remote Sensing: Enabling Precise Decision-Making

In the realm of remote sensing, LEO satellites' high-resolution imaging and real-time data transmission capabilities offer robust support to industries such as agriculture, meteorology, and environmental protection.

Through real-time monitoring of crop growth conditions, farmers can precisely apply fertilizers and water, enhancing crop yields and quality. Meteorological departments can utilize satellite data to more accurately predict weather changes and issue early disaster warnings.

In environmental protection, satellite remote sensing technology can monitor forest cover, water resources, and air pollution in real-time, providing a scientific basis for environmental protection decisions.

Navigation and Positioning: Enhancing Accuracy and Reliability

The development of autonomous vehicles places stringent demands on the stability and low latency of communication technology, and LEO satellites provide a reliable guarantee for this.

Chinese companies Geely and BYD have integrated satellite communication functions into their new models. With the assistance of LEO satellites, vehicles can obtain more accurate traffic information and achieve more efficient autonomous driving.

In the aviation and navigation fields, LEO satellites can also provide real-time positioning and communication services for airplanes and ships, significantly improving transportation safety and efficiency.

Rocket Launch Industry: Reducing Costs with Recyclable Technology

Rocket launch costs are a significant factor constraining the development of the satellite industry. However, recent breakthroughs in recyclable rocket technology have made it possible to reduce these costs.

SpaceX's Falcon 9 rocket, through multiple recoveries and reuses, has lowered the cost of a single launch to approximately USD 62 million, a reduction of about 70% compared to traditional rocket launch costs.

Companies such as Blue Origin and Relativity Space are also actively researching and developing recyclable rocket technology. As technology continues to mature, rocket launch costs are expected to decrease further.

Diversified Profit Models

With the proliferation of satellite internet, the terminal equipment manufacturing industry will embrace new development opportunities. Currently, various types of terminal equipment compatible with satellite networks, such as portable satellite antennas and in-vehicle satellite communication terminals, are available on the market.

SpaceX, with its innovative design and large-scale production capabilities, has emerged as an industry leader. Its Starlink satellites employ a highly integrated design, with a single satellite costing only about USD 500,000. Additionally, SpaceX has established automated production lines, significantly enhancing satellite production efficiency.

To date, Starlink has over 1 million users in multiple countries and regions worldwide, and it is projected that by 2025, the user base will exceed 5 million.

Besides providing internet access services, Starlink is also exploring other profit models, such as IoT data transmission and satellite TV.

Moreover, companies like Amazon's Kuiper project and OneWeb are actively deploying in the satellite internet market, and future market competition is poised to intensify.

Apart from SpaceX, Chinese companies such as GalaxySpace and Zero-G Space are also actively deploying in the satellite manufacturing sector. Through technological innovation and cost control, they are expected to carve out a niche in the global market.

China's state-backed enterprise SpaceSail, with government support, is actively deploying and plans to deploy 15,000 low-orbit satellites by 2030, eventually reaching 43,000.

Chip manufacturers like Qualcomm and MediaTek are also actively researching and developing chips that support satellite communications. As technology continues to advance, terminal equipment will become smaller, cheaper, and have broader application scenarios.

Conclusion:

Goldman Sachs' prediction that the global LEO satellite market may grow sevenfold in the next five years offers significant momentum to the industry. Sectors such as satellite manufacturing, rocket launches, satellite operation services, and terminal equipment manufacturing will witness tremendous development opportunities.

However, opportunities are invariably accompanied by challenges. Only those enterprises with innovative capabilities, cost control abilities, and market development expertise will be able to stand out in this fiercely competitive market and share the development dividends of the LEO satellite market.

Content References: Goldman Sachs Viewpoint | Global Satellite Market May Grow Sevenfold; Mumbai Guide: Starlink Enters India: Unlocking Growth Potential in Emerging Markets; Chen Shanzhi from China Information and Communications Technology Group: LEO Satellite Communications 'Reality is Grim'!