Capacity crunch may abort U.S. satellite boom as sanctions threaten Russia launches

div classBodysc17zpet90 cdBBJodivpBy Akash Sriramp

pReuters – Houston, we have a problem pdivdivdiv classBodysc17zpet90 cdBBJodiv

pU.S. rocket companies are facing the daunting task of ferrying hundreds of satellites to space in the coming years as sanctions sideline the Russian space launch industry.p

pSpaceX, Astra Space and Rocket Lab USA are among a handful of U.S. companies expected to fill the vacuum, but industry officials have doubts about their capacity to quickly rampup. p

pAs the race between companies, including Elon Muskowned SpaceX‘s Starlink and Amazon.com Inc’s Project Kuiper, for building giant satellite constellations to beam broadband internet from space heats up, demand for launches is expected to skyrocket.p

pMore than 800 satellites under 100 kilograms are expected to be put in orbit this year alone, nearly double the number of launches in 2021, according to data from launch service aggregator Precious Payload.p

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ppSmall satellite launches set to double in 2022: https:graphics.reuters.comUSASATELLITELAUNCHESzjvqkdllwvxchart.pngp

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ppAnd with Project Kuiper taking up significant capacity over the next few years, analysts expect the industry to face some launchrelated delays.p

p“Come 2024, 2025, when all these mega constellations need a launch, there is going to be a real problem,” Rocket Lab CEO Peter Beck told Reuters, referring to the networks of communications satellites being built by SpaceX, AST Spacemobile and OneWeb.p

pRocket Lab is among a new breed of firms building miniaturized propulsion systems to cash in on an exponential rise in demand for putting compact satellites in the socalled low earth orbit.p

pIn 2021, satellites launched by OneWeb and SpaceX accounted for the launch of about threequarters of small satellites, according to industry analytics firm BryceTech.p

pStill, Russia maintained a 16 share of the global launch market over the past five years, according to historical databases.p

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ppRussias market share over the past five years: https:graphics.reuters.comUSASATELLITELAUNCHESmovanbrrdpachart.pngp

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ppIts share was actually larger, given that Soyuz rockets were also launched under a sincesuspended FrenchRussian joint venture named Starsem.p

pAbout twothirds of Soyuz launches were commercial or in support of the International Space Station ISS, while the rest were for Russias domestic customers, Quilty Analytics analyst Caleb Henry said. p

pIf access to Russias capabilities are lost due to Western sanctions on the country for its invasion of Ukraine, companies in Europe and the United States will have to quickly step in to meet demand.p

pThat, however, may not be all that easy, given the complexities and challenges involved in building and launching new rockets.p

p“It is always possible that new vehicles will come online faster, thanks to improved manufacturing techniques, but precedent suggests it will be difficult to achieve high launch cadences for the next few years,” analyst Henry said.p

pRocket Labs Beck said the launch crisis would also apply to smaller satellites used to image the Earth and conduct scientific observation that usually share a ride to orbit on a rocket with other satellites.p

pLAUNCH CRUNCHp

pDelayed launches can affect satellite internet companies in multiple ways. There is a risk of losing launch rights if they do not adhere to an FCC mandated deadline, while some firms may not see return on investment unless their satellite is in orbit.p

pUnited Launch Alliance, a joint venture between Boeing Co and Lockheed Martin, is set to replace its Russian engines with those made by Jeff Bezosbacked Blue Origin. Still, Western launch companies have a long way to go.p

pHowever, Amazons blockbuster launch contracts for Project Kuiper can incentivize rocket makers to speed up production, industry experts say.p

pSpaceXs Starship launch vehicle is set to be in mass production sooner and analysts expect it to meet some demand. The company also launches satellites for and operates Starlink.p

p“Longer term, launch constraints can be alleviated by Starship. Starship could crush pricing in the commercial market if Elon wants to, but my prediction is he is much more focused on getting humans to Mars,” said Deutsche Bank analyst Edison Yu.p

pYu added that “new space companies” such as SpaceX, Rocket Lab and Astra Space are the winners when demand rises and there is no dependence from satellite manufacturers around the world on Russias Soyuz rocket.p

pEarlier this year, OneWeb decided to abandon Russian launch services and signed a deal with rival SpaceX to put its satellites in orbit. p

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pp Reporting by Akash Sriram in Bengaluru Editing by Anil DSilva and Ben Klaymanp

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