One commentator, on the September 6th news that owners Maxar Technologies is looking at “strategic alternatives” as far as its satellite building Space Systems/Loral’s Palo Alto facility is concerned, said “merge it, sell it or scrap it”.
Space Systems/Loral (SS/L) is not wholly exiting the satellite business, but there are major question marks over its Palo Alto, California manufacturing facility. The problem is the severe downturn in demand for geostationary communications satellites, and SS/L was a major supplier to the sector.
Not so many years ago there was a 20 per year global demand for geostationary satellites. That number has evaporated to – at best – eight to 12 a year.
Maxar has told shareholders that it was time for a complete re-think of its satellite-building strategy. Maxar says its could partner with an existing satellite manufacturer in order to gain scale in the sector, or sell the business, or simply exit the business once it has complete its existing order book.
An additional option is to sell the Palo Alto and related real estate in Silicon Valley, which could realise $150-$200 million.
As well as SS/L the other large satellite builders are Boeing and Europe’s Airbus Defence & Space. Smaller satellites are built by Thales-Alenia, Northrop Grumman (the former Orbital/ATK) and Surrey Satellite Tech.
There’s no shortage of demand for smaller Low Earth Orbiting (LEO) satellites, with thousands due to be build over the next five years.