Satellite Manufacturing and Launch System Market Size, Share & COVID-19 Impact Analysis, By Type (Satellite Manufacturing and Satellite Launch Systems), By Application (Communication Satellite, Military Surveillance, Navigation Satellite, Earth Observation Satellite, and Others), By End-Use (Commercial and Military) and Regional Forecast, 2020-2027

The global satellite manufacturing and launch system market size was USD 25.15 billion in 2019 and is projected to grow from USD 23.83 billion in 2020 to USD 54.17 billion in 2027 at a CAGR of 12.45% in the 2020-2027 period.  The global impact of COVID-19 has been unprecedented and staggering, with satellite manufacturing and launch systems witnessing a negative impact on demand across all regions amid the COVID pandemic. Based on our analysis, the global market exhibited a lower growth of -5.25% in 2020 compared to the average year-on-year growth during 2016-2019.

The satellite manufacturing and launch system market comprises a series of activities, such as satellite manufacturing, integration of satellite payload to the rocket, launch assembly system, and launch infrastructure. Satellites are used for various applications such as satellite communication, satellite broadcasting, remote sensing, earth observation, satellite navigation, and others.

A satellite launch system includes the launch vehicle, vehicle assembly, launchpad, fueling systems, and other related infrastructure. On 26^th October 2020, China launched three spy satellites for the Chinese military from a southwestern Chinese launch base.

Satellite Manufacturing Industry to Face Unprecedented Challenges Due to COVID-19 Pandemic

The COVID-19 pandemic has affected the space industry in three main domains: By directly affecting the businesses of small and medium-sized enterprises (SMEs) across the globe, by disrupting the supply chain management, and by the financial impact on firms and financial markets. Moreover, due to the lockdown in major countries such as the U.S., France, Germany, China, India, and Japan, there was a massive impact on the space industry, resulting in the suspension or postponing of satellite launches.

Key satellite manufacturing players such as SpaceX, United Launch Alliance or ULA Rockets Labs, among others have launched technologically advanced launch vehicles and satellites' production systems. According to the U.S. Department of Commerce, it is studied that small space-based companies are largely dependent on research and development (R&D) capabilities. These satellite manufacturing companies experienced the major impact of the pandemic. The companies are implementing safety norms to protect their workforce from the spread of the virus in the work facilities.

LATEST TRENDS

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Growing Demand for Miniaturized Satellite Component to Spur Business Opportunities

The miniaturization in satellite electronic systems and components can significantly improve the overall efficiency with reduced weight. To reduce weight and associated cost, the commercial-off-the-shelf (COTS) approach is used in the miniaturization technology. In the COTS approach, space companies are procuring standard terrestrial commercial hardware to minimize the overall cost of the system.

The constellation of small satellites in low earth orbit is generally carried out at lower costs. It comprises satellite constellation activities such as earth observation, communication with earth-based control stations, and navigation activities. Hence, the growing demand for small satellites is propelling the demand for miniaturized satellite components.

DRIVING FACTORS

Growing Development of Satellite Launch Vehicle to Boost Satellite Manufacturing and Launch System Market Growth

The increased investment by government and space agencies in the development of technologically advanced satellite launch vehicles is a crucial driver for the market's growth. According to the Department of Defense (DOD), the USD 14.1 billion was requested for National Security Space (NSS) in 2020 compared to the USD 12.3 billion in 2019. Out of the total amount, USD 8.4 billion, USD 2.6 billion, and USD 3.0 billion are allocated for the research, development, test, evaluation (RDT&E), procurement, and operation & maintenance. The National Security Space looks after the government space launches, satellites, and other activities.

Companies such as SpaceX are collaborating with government space agencies NASA to design and develop reusable satellite launch vehicles to minimize the overall program cost and space debris around the earth's orbit. SpaceX comprises four Falcon 9 reusable launch vehicles in its inventory and plans to design ten reusable launch vehicles by the end of 2020. This will propel the growth of the market in the U.S. during the forecast period. Recently, the Europe Space Agency (ESA) increased its focus on the development of Ariane 6, an expendable launch system. For this particular development, the ESA collaborated with ArianeGroup. ESA was planning to replace the Ariane 5 with Ariane 6 for future launch.

Increased Demand for Precise Network for Commercial and Military Application to Drive Market

In the last few years, there has been an increased focus on more satellite launches to expand the satellite network and improve satellites' capabilities. The company named SpaceX is aimed to install 1,594 satellites by 2020, it is also planning to launch the Starlink phase 1 program by 2021. The company aims to focus on private services and mainly offering them to Canada and the U.S. market. The increasing demand for high-speed data transmission services has pushed the demand for communication satellites in LEO. Moreover, the defense forces are increasing their spending on satellite-based advanced technology to expand global coverage. This will facilitate the military intelligence, surveillance, and reconnaissance (ISR) system. The ISR system provides highly accurate, coherent, assured, and relevant information and intelligence to support military combat missions. The OEMs such as SpaceX collaborate with NASA to design and develop lightweight and cost-effective satellites for commercial and military applications.

RESTRAINING FACTORS

Weight and Heat of Satellite Launch Systems May Hinder the Market Growth

The space industry is concerned about the weight, and the cost of the satellite launch systems, optimization of the propulsion system weight and related system cost is the major concern for the technicians, as the intricate design and development cost associated with advanced satellite launch system challenge to the design engineering and manufacturing companies.

Companies such as Blue Origin, NASA, and United Launch Alliance (ULA), SpaceX focus on R&D for designing lightweight and cost-effective propulsion launch systems. Thus, research in the design aspect is majorly focused. Lightweight material and processes like 3D printed components are considered for the design of components and expected to create new business opportunities.

SEGMENTATION

By Type Analysis

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Satellite Manufacturing Segment Held Highest Shares in 2019 Due to Rising Demand for Satellite Communication and Surveillance Applications

Based on the type, the market is segmented into satellite manufacturing and satellite launch systems. The satellite manufacturing segment held the highest shares of 65.45% in 2019. The rising demand for satellite communication and surveillance applications boosts the manufacturing process of advanced satellite systems and components.

The satellite launch systems segment is projected to grow at the highest CAGR during the forecast period. The growth is attributed to the rising demand for reusable launch systems to reduce overall satellite launch costs. Furthermore, increasing modernization programs for launch systems and components to drive the market growth during the forecast period.

Private companies are mainly focusing on the development of reusable launch vehicles (RLV). SpaceX (the US) is actively involved in the designing and developing of reusable launch vehicles to deploy in earth observation, navigation, and communication satellites.

By Application Analysis

Navigation Satellite Segment is the Fastest-Growing Segment Propelled by Growing Use of Satellite Navigation Systems for Commercial and Military Applications

Based on the application, the market is classified into communication satellites, military surveillance, navigation satellite, earth observation satellite, and others. The communication satellite segment is estimated to be the largest segment in 2019. The rise in demand for satellite internet services to access high data transmission speed results in increased deployment of communication satellites in low earth orbit or LEO.

The navigation satellite segment will showcase the highest growth during 2020-2027. The rising usage of global navigation satellite systems for a wide range of commercial and military applications boosts the market growth. Furthermore, the emergence of 5G technology has further augmented the demand for navigation satellite systems.

The military surveillance segment is projected to grow at a significant compound annual growth rate through the forecast period. The segment's growth is accredited to the growing focus on expanding satellite networks to improve military surveillance capabilities in developing countries such as China and India.

By End Use Analysis

Commercial Segment Will Showcase Highest Growth Due to Rising Demand for High-Speed Internet and Commercial Services

Based on the end-use, the market is divided into commercial and military. The military segment is evaluated to be the largest segment in 2019. Rising investment by defense forces and private agencies to manufacture advanced military systems based on satellite technology drives the market growth. The growing usage of satellites for military communication and surveillance application is further supporting the market growth.

The commercial segment is anticipated to show the highest CAGR during 2020-2027. The growth is attributed to the increasing focus on expanding satellite networks to offer high-speed internet services and other satellite technology-based commercial services to end-users. Satellite television, weather forecasting, navigation services, and others are projected to drive segment growth during the estimated period.

REGIONAL INSIGHTS

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North America dominated the global market of satellite manufacturing & launch systems in 2019. North America's market size stood at USD 9.64 billion in 2019. The growth is attributed to the high investments by the U.S. government and space agencies in satellite manufacturing and the development of reusable launch systems. In September 2019, NASA awarded a contract of USD 4,600 million to Lockheed Martin Corporation to provide six reusable Orion crew capsules integrated with lightweight 3D printed modules.

Asia-Pacific will showcase remarkable growth, and is projected to grow with the highest CAGR during the forecast period. The development is due to increasing satellite launch infrastructure and satellite launch programs from countries such as China, India, and Australia. In November 2020, the Indian Space Research Organization (ISRO) has successfully launched 10 satellites consisting of earth observation satellites and payloads.

Europe is anticipated to show significant growth due to key players such as Airbus S.A.S., Arianespace, ISISPACE GROUP, JSC Academician M.F. Reshetnev, and others drive the development of the market across Europe.

The market in the Middle East and the rest of the world will witness moderate growth during the foreseeable years. The Middle East's market growth is attributable to the increased defense spending by countries such as Saudi Arabia, the UAE, and Israel. Whereas the market’s growth in the rest of the world is ascribed to the increased military programs conducted by countries in Africa and South America.

KEY INDUSTRY PLAYERS

Space X and Lockheed Martin Corporation are Prominent Players Offering Wide Range of Satellite Launch Solutions

Lockheed Martin Corporation provides a wide range of small satellites, mid-satellites, and GEO-satellites. It has nearly built 800 spacecraft. The company has experience in the design and development of reusable space solutions. For advanced space solution system development, the company has adopted strategies such as technological collaboration, joint venture, and investment in R&D activities. In August 2020, the Space Development Agency signed a contract worth USD 187 million with Lockheed Martin Corporation to build 10 satellites for the agency's tranche zero transport layer.

LIST OF KEY COMPANIES PROFILED:

• Airbus S.A.S (The Netherlands)


• Arianespace (France)


• Boeing (The U.S.)


• GeoOptics (Canada)


• ISISPACE GROUP (The Netherlands)


• JSC Academician M.F. Reshetnev (Russia)


• Lockheed Martin Corporation (The U.S.)


• Maxar Technologies (The U.S.)


• SPACEX (The U.S.)


• ViaSat Inc. (The U.S.)

KEY INDUSTRY DEVELOPMENTS:

• December 2020 - Lockheed Martin Corporation was awarded a contract worth USD 511 million by the U.S. Space Force for two GPS satellites. GPS 3F is the latest version of the satellites that provide navigation, global positioning, and timing services.


• November 2020 - Arianespace signed an agreement with one of the operators for an Ariane 5 launch of a communications satellite into geostationary orbit. The satellite is scheduled for launch in 2022.

REPORT COVERAGE

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The satellite manufacturing and launch system market research report provides a detailed analysis of the market and focuses on key aspects such as key players, types, commercial applications, and end-use. Moreover, the report offers insights on global market trends for satellite manufacturing & launch systems, competitive landscape, and highlights key industry developments. In addition to the factors mentioned above, the market report encompasses several direct and indirect factors that have contributed to the sizing of the global market over recent years.

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