Foxconn sends satellites to space in diversification effort

The world’s largest iPhone producer is heading into space.

Two prototype low-Earth orbit satellites manufactured by Hon Hai Precision Industry Co.better known as Foxconn, took off aboard a EspaceX rocket from Vandenberg Space Station in southern California on Saturday.

The launch of the LEO satellites marks a key moment for the Taiwanese electronics maker as it diversifies into new sectors, a shift that becomes all the more urgent as some of its established businesses such as smartphones and laptops struggle. Foxconn aims to demonstrate that it has the satellite technology to meet the growing demand for communications from space.

While that of Elon Musk Space Exploration Technology Company. has manufactured and launched more than 5,000 LEO satellites for its Starlink constellation, Foxconn is betting it will be able to make satellites primarily for businesses and governments.

Satellites, co-developed with Taiwan National Central University, are the size of a backpack, weigh about 9 kilograms (20 pounds) each and carry cameras, communications devices and other equipment. They are designed to orbit the Earth every 96 minutes at an altitude of 520 kilometers (323 miles).

New growth

Since taking over from founder Terry Gou in 2019, Foxconn Chairman Young Liu has sought ways to diversify, focusing on electric vehicles, digital health and robotics, and intelligence technologies. artificial intelligence, semiconductors and communications satellites.

“I needed to find something for the company to grow over the next 10 or 15 years,” Liu said in an interview with Bloomberg Businessweek.

Turnover of Foxconn, third largest private employer in the world after Walmart Inc. And expected to fall about 6% this year to NT$6.2 trillion ($192 billion), according to estimates compiled by Bloomberg News.

Order book

While Apple Inc. needs millions of iPhones per quarter and updates models frequently, customers can go a long time between orders for LEO satellites, making business much less predictable, said Tim Farrar, Telecom’s president, Media and Finance Associates Inc., a consulting firm in Menlo Park, California. Foxconn makes about two out of every three iPhones worldwide.

For a contract manufacturer like Foxconn, “unless you find another one that comes along at the right time, your life can be very difficult,” he said.

The government orders could provide some security for Foxconn as it expands its satellite business, according to Farrar.

“Foxconn believes that if the Taiwan government gives us a base of orders every year, everything will be fine,” he said.

Taiwan working on plan to launch its first LEO communications satellite, part of development strategy spatial alternatives to the submarine cables which provide most of the island’s Internet connections.

Learn more: Foxconn makes your iPhone. Its goal is now to manufacture electric cars

Another line of support will be Foxconn’s electric vehicle business because it requires real-time communications technology, said Jason Wang, Foxconn analyst at MasterLink Securities Corp. in Taipei.

“You have to have a solution in place for your car to use it,” Wang said. “If they want to export this business, they must at least have an infrastructure to demonstrate the technology in Taiwan. »

The company’s experience in the field of electronics and the know-how acquired in the manufacture of smartphones, game consoles and other devices should contribute to this.

“Taiwan is very good at making all kinds of commercial electronic products,” said Shiang-yu Wang, a researcher at the Institute of Astronomy and Astrophysics at Academia Sinica in Taipei. “These companies can easily pivot” into space.

— With help from Debby Wu and Reed Stevenson

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