One of the biggest iPhone manufacturers is venturing into space. On Saturday, two prototype low-Earth orbit satellites created by Hon Hai Precision Industry Co, also known as Foxconn, were aboard a SpaceX rocket launched from Vandenberg Space Force Base in southern California.
This shift into satellite technology is a significant move for the Taiwanese electronics manufacturer as it searches for new opportunities to offset the challenges faced by its existing businesses, such as smartphones and laptops. Foxconn aims to showcase its satellite technology to meet the growing demand for space communications.
While Elon Musk’s Space Exploration Technologies Corp has already produced and launched over 5,000 LEO satellites for its Starlink constellation, Foxconn’s goal is to manufacture satellites primarily for corporate and government clients.
The satellites, which were co-developed with Taiwan’s National Central University, are the size of a backpack, weighing about 9 kilograms (20 pounds) each. They are equipped with cameras, communication devices, and other equipment, and are designed to orbit Earth every 96 minutes at an altitude of 520 kilometers (323 miles).
New growth
Since assuming the role of chairman in 2019, Foxconn Chairman Young Liu has been exploring diversification, focusing on areas like electric vehicles, digital health, robotics, artificial intelligence, semiconductors, and communication satellites.
“I needed to find something that would enable the company to grow for the next 10, 15 years,” Liu said in an interview with Bloomberg Businessweek.
It is projected that Foxconn’s revenue, the world’s third-largest private employer following Walmart Inc and Amazon.com Inc, will decrease by approximately 6% this year to NT$6.2 trillion (US$192bil), according to estimates compiled by Bloomberg News.
Order book
While Apple Inc regularly requires millions of iPhones per quarter, orders for LEO satellites may be infrequent, making the business less predictable, according to Tim Farrar, president of Telecom, Media and Finance Associates Inc. Foxconn currently manufactures about two-thirds of all iPhones in the world.
For an outsourcing manufacturer like Foxconn, “unless you can find another one that comes along at the right moment, your life can be very difficult,” he said.
Government orders could offer some stability to Foxconn as it expands its satellite business, as per Farrar.
“Foxconn is thinking, if the Taiwanese government gives us a baseline of orders every year, that will be OK,” he said.
Taiwan is working on launching its first LEO communication satellite as part of a strategy to develop space-based alternatives to the undersea cables that provide the majority of the island’s Internet connections.
Another avenue of support for Foxconn will be its electric-vehicle business, as real-time communication technology is necessary for these vehicles, stated Jason Wang, a Foxconn analyst with MasterLink Securities Corp in Taipei.
“You need to have a solution in place for your car to use,” Wang said. “If they want to export this business, they at least need to have an infrastructure in place to demo the technology in Taiwan.”
The company’s experience in electronics and knowledge gained from manufacturing smartphones, games consoles, and other devices should be advantageous in this endeavor.
“Taiwan is very good at making all different kinds of commercial products in electronics,” said Shiang-yu Wang, a research fellow at the Academia Sinica’s Institute of Astronomy & Astrophysics in Taipei. “These companies can easily switch” to space. – Bloomberg
