China's Space Lasers (and other things)
Plus a high in launch activity 🛰️, CASC in Xiong'an 👨🏻🌾 , competing VTVLs 🚀, and GeeSpace Starting to Rev its Engines 🚗
Dear Readers,
Happy Monday, and welcome to the fourth quarter of the year. This month was a doozy, with 42 satellites sent to orbit on 8 launch missions. For those in the APAC region, or interested in space conferences in Thailand, there’s a public service announcement at the end of this email, but for now, back to China stuff.
Before digging into some news headlines from this month, a piece on a sometimes thorny, often under-appreciated, but increasingly important topic, China’s space industry supply chain, and the way it has evolved over the past 2 decades.
A few precursory notes before delving into a topic that has, until pretty recently, been outside of my focus.
What do I mean by supply chain? In this article, I will be talking about suppliers to satellite and rocket manufactures. The companies building the propulsion, communications, measurement and control, electronics, and other systems and subsystems and their respective components and materials. I’ll be making some generalizations based on a large database that we maintain over at Orbital Gateway Consulting.
There are some generalizations here, especially splitting the supply chain into “things with an incumbent SOE manufacturer” and “things without an incumbent SOE manufacturer”. That being the case, big picture trends still hold.
China’s Space Industry Supply Chain until 2014
China’s space industry supply chain was very straightforward until 2014: almost everything was built by a large SOE (mostly CASC, and a few companies within CASIC, CETC, etc.) or specialty institutes of the Chinese Academy of Science (CAS). A small number of “commercial” companies were participating in areas like basic materials, but even these companies were typically large, often (state-owned) conglomerates with business in many largely state-owned industries including shipbuilding, aviation, etc.
Most of the supply chain was focused on essentials rather than many flashy new payloads, and almost all of it was built by numbered subsidiaries of CASC. To take one example: within CASC are several “first-tier” subsidiaries, companies we all know and love. This includes the China Academy of Launch Vehicle Technology (CALT, aka 1st Academy), China Academy of Spaceflight Technology (CAST, aka 5th Academy), and the Shanghai Academy of Spaceflight Technology (SAST, aka 8th Academy).
Within these “First-tier” subsidiaries are tens, or in some cases hundreds of second-tier and third-tier subsidiaries. Typically the first-tier subsidiary builds the rockets and satellites, with second-tier making systems and subsystems, and third-tier making subsystems, materials, and components. The below graphic shows the different tiered subsidiaries inside of satellite and rocket-maker SAST, with the 149th in particular being a notable example of tiering. The Shanghai Space Equipment Main Factory (SAST 149th) is owned by SAST (8th). The 149th then oversees, and in most cases majority-owns the illustrated 4 second-tier subsidiaries (e.g. 223rd, Shanghai Composite Material Technology Co., etc).
With SAST receiving orders from major government entities (Ministry of Natural Resources for Gaofen satellites, for example), the parent company then sub-contracts out various elements to their own subsidiaries, and sometimes, other entities.
This has meant that the supply chain needed to launch batches of first, second, and third-gen systems (e.g. BeiDou, Gaofen, Yaogan) is pretty well spoken for, albeit by companies that build in a rigid, at times expensive, but usually reliable way.
In the pre-2014 supply chain, a lot of specialized products (and scientific payloads) were provided by the Chinese Academy of Sciences and its labyrinth of institutes, research centers, and laboratories. For example, atomic clocks for BeiDou have been provided by the CAS Wuhan Institute of Physics and Mathematics (Rubidium clock), and the Shanghai Observatory of the CAS (Hydrogen atomic clock), in addition to being provided by SOEs such as the Beijing Radio Measurement and Testing Institute (aka CASIC 2203) and CAST Xi’an (aka CAST 504th Academy).
As China began opening up the industry to commercial players in 2014, and especially as large, commercial-ish projects have picked up momentum in the past few years, it has been a challenge for this existing supply chain to meet the price, performance, quantities, and timeline requirements of China’s burgeoning commercial space ecosystem. Supply chain can be divided in many ways, but one instructive divide is:
Components or systems for which there’s an established SOE manufacturer, who may have already ramped up production, and can sell excess capacity to commercial space companies.
Components or systems for which there is no established manufacturer aside from a few CAS institutes that are largely academic/research-focused
The second type have, all else equal, seen a lot more investor interest, and in at least a few cases, a looming sense of overcapacity.
China’s Space Industry Supply Chain Since 2014
To review, as of 2014, the Chinese space industry supply chain was dominated by numbered SOEs and subsidiaries who built big expensive satellites with small expensive systems and components, reliably and consistently, but not particularly dynamically.
How has this changed since 2014? Two ways:
Part 1: Established Technologies
1. For technologies falling under category 1 above, e.g. stuff that SOEs can already make, we have seen some commercial activity, but not an overwhelming amount. To take one example, rocket propulsion systems.
There are two CASC Tier 1 subsidiaries, Academy of Aerospace Solid Propulsion Technology (AASPT, aka CASC 4th Academy) and their “sister company” focused on Liquid propulsion (AALPT, aka CASC 6th Academy), that build lots of propulsion systems for rockets and missiles.
As we know, China has 20+ commercial launch companies, all trying to build their own rockets, and all in the market for propulsion systems (lest they develop them in-house, which some do). A few commercial companies have sprung up offering rocket propulsion systems, most notably Jiuzhou Yunjian (JZYJ, 九州云箭) and S-Motor (灵动飞天), but broadly speaking, there are a lot more commercial companies building rockets than there are building rocket engines. Kind of peculiar.
Why? Because a bunch of the most successful commercial launch companies are buying rocket engines from AASPT and AALPT. This month alone, CAS Space used AASPT engines for all 4 stages of its Lijian-1, as did China Rocket for its Jielong-3 launch. And on August 29th, the Ceres-1 launched by Galactic Energy was powered by, you guessed it, engines from AASPT. AALPT, for their part, is likely to emerge as a supplier for commercial liquid engines, in addition to its known supply of engines for the LM-2F, -7, 3B, and others.
JZYJ and S-Motor, for their part, are doing a decent business and growing moderately, but they remain a drop in the proverbial ocean of SOE-dominated rocketry. This is quite the opposite in new, emerging technology areas without established players.
Part 2: New Technologies
2. For technologies under the 2nd grouping above, i.e. ones for which there was no well-established supplier, it has been a stampede. Private capital, and more recently provincial governments, have salivated at the prospect of all the lasers, hall effect thrusters, and the like that China’s large non-geostationary constellations will need.
For example, as recently as late 2019, there were almost no commercial companies in China developing laser communication terminals. Quite a few traditional players (CASC 704th, CAS Shanghai Institute of Optics and Precision Mechanics, CASIC 25th, and the like) were building laser comms terminals in small quantities for missions like BeiDou, but these were very specific lasers.
Since early 2020, we have seen the establishment of HiStarlink, Laser Link, Laser Starcom, Shanghai Qionglong Science & Technology (aka Shanghai Dome), alongside several spinoffs of the CAS such as the CAS Weihai Institute of Advanced Laser Communications Technology, established in August 2021.
The results have been, seemingly, impressive. This month, HiStarlink launched 2 of its 4th-generation laser comms terminal into orbit onboard the Xingshidai-21 and Xingshidai-22 satellites. On the same rocket was the Tianyan-15 satellite, aka Final Frontier-1, which included a Laser Starcom laser comms terminal, the company’s 8th, sent into orbit just 39 days after their 7th. Not to be outdone, Laser Link provided a laser communication pointing mechanism onboard multiple Yaogan satellites launched in August. The very small number of long-established commercial laser comms firms, namely Intane Optics (founded in March 2003, and providing laser technology to satellites like ChinaSat-16 all the way back in 2017), have not been as public about recent missions.
Moving forward, we can see early signs of a looming oversupply. Days after their launch of 2x 4th-gen terminals, HiStarlink inaugurated a production line in Wuxi with an annual capacity of 400 units. A few weeks before their participation in the Yaogan mission mentioned above, Laser Link announced a “more than ¥100M” round of funding, which they earmarked for accelerating “large-scale commercial application”.
Takeaways: China’s Evolving Space Supply Chain
China’s space industry supply chain is evolving from one where massive hierarchies of numbered SOEs build everything in what are effectively quotas for large state-run missions, to one where a wide variety of commercial companies, CAS spinoffs, and other entities are building certain components, subsystems, and systems.
Up until now and likely for the near-term, this has meant a broader variety of cheaper options for the dozens of Chinese satellite manufacturers/integrators trying to find ways to make nascent commercial space business models work. Eventually, though, we are likely to see substantial emphasis on export markets, especially if domestic oversupply becomes a real issue.
This would likely mean that in some markets, Chinese laser comms terminals, hall effect thrusters, and the like, will rush in at low prices. For countries that could never have justified having their own laser comms builders in the first place, but are considering a national space program, this should mean more, cheaper options, with limited downside. But just as Chinese electric vehicles pose different opportunities/threats to different markets, there will be some countries where cheap, Chinese-made laser comms terminals threaten domestic champions (or at a minimum, fledgling domestic commercial space companies).
And in other news this month
The month saw a high for the year in satellites launched with 42 across 8 launches. Some of the launch highlights included:
The third batch of (10) GeeSpace satellites was launched on a LM-6 from Taiyuan Launch Center on 6 September. The mission was the largest-mass mission ever to be carried out by the LM-6, with SAST (the rocket builder) that the model has “further improved the rocket’s carrying capacity through flight trajectory optimization and satellite-rocket separation mechanism weight reduction”.
We also saw two launches within a handful of hours, with six Kuanfu (wide swath) satellites launched from Taiyuan for CGSTL on 20 September, and 4 Tianqi satellites for Guodian Gaoke launched from Xichang a few hours later.
The CGSTL satellites were described by the company as the “latest generation of wide coverage satellite, and the first ultra-wideband, high-resolution optical EO satellite developed in batches in China”. The Tianqi launch means that Guodian Gaoke now has 29 satellites on-orbit, and is closing in on completing its 38-satellite first-generation constellation.
Deep Blue Aerospace and Landspace both attempted VTVL launches, with somewhat different results. Landspace’s ZQ-3 completed a 10km VTVL test on 11 September, which was a complete success. Deep Blue Aerospace attempted a similar test of their Nebula-1 rocket on 22 September, and experienced an abnormality during final landing phase. Despite the rough landing, the DBA test included 11 major verification tests, of which 10 were successfully completed.
CASC established two new subsidiaries within days of one another. The first was the CASC Commercial Satellite Company, established in Xiong’an New District to the South of Beijing with a registered capital of ¥1.2B, and shareholders including CASC and subsidiaries. A few days later, CASC created the CASC Commercial Launch Company in Shanghai with a registered capital of ¥1B, with shareholders including Shanghai Government investment vehicle SAILSpace as well as AASPT and SAST. The moves seem to be the latest efforts by CASC to plant flags in the commercial side of China’s space sector.
Also in Xiong’an and likely not far from CASC Commercial Satellite Company, we saw the completion of the new headquarters building for China SatNet. As discussed last month at length, the company’s progress in terms of satellites is limited thus far, but with the backing of the state, they have a lot of money and political capital.
Last, but certainly not least, the China-Africa Summit took place in Beijing, which saw a plethora of space-related announcements including Senegal joining the ILRS, a visit by the Prime Minister of Burkina Faso to the Chinese Academy of Sciences Institute of Space Information Innovation, and meetings between Chinese broadcaster Star Times and the President of Mozambique, among others.
And before signing off, a quick note about the APSCC Conference coming up from 5-7 November in Bangkok, Thailand. The conference includes 3 days of panels and discussions about Asian space and satellite communications, among which will be a China Space Industry Update presentation by yours truly, wearing my Novaspace hat. The conference includes a Youth Development Workshop, and cultural activities such as a Thai Street Food Tour 🇹🇭 For a discount of 15% on conference registration, use discount code APSCC24CSM.
Interested parties can register here, hope to see you in Bangkok!
Thanks for reading,
Blaine