By Chris Forrester
The topic addressed in a panel at the Smallsat Symposium (Does Vertical Integration in manufacturing risk the dilution of capital and effort) is frequently at the top of every manufacturer’s concerns. What should they build themselves, and what would be best bought in? The panel’s moderator: Brian Weimer, Partner, Telecom Team Leader, Sheppard Mullin heard the pros and cons from his assembled experts.
Daniel Gizinski, President at Comtech Satellite Network Technologies said that the company had seen ebbs and flows as the trends went one way and another. “We have known eras when vertical integration was very popular, and other times less so. Sometimes, especially when you a building a unique product then the market likely doesn’t exist as a supplier. Indeed, many companies vertically integrate out of sheer necessity. We have also seen a swing over the past 10 years or so in standards-based components and this suggests moving together [with suppliers].”
Dr. Emile de Rijk, CEO & Founder at SWISSto12 which started life as an antenna manufacturer which grew into building advanced payloads and now building full satellites. SWISSto12 supplies smaller satellites for GEO customers. “The volumes are lower and the overheads needed to meet radiation and other qualifications are higher so for us there’s less incentive to vertically integrate. We focus on payload and work closely with suppliers and partners for the other elements.”
Chris Winslett, General Manager, Blue Canyon Technologies explained what to Blue Canyon were the primary drivers, and admitted that their philosophy was a little different from some of their competitors. “We started as a component making elements for CubeSats then moved into making reaction wheels, and over time transitioned to making CubeSats themselves and now small satellites.”
Tina Ghataore, Global Chief Strategy & Revenue Officer at Aerospacelab, which is a Belgian-based company with 8 satellites launched and more than 12 payloads in orbit. It is in the process of building a ‘mega-factory’ in Charleroi, Belgium to increase production. Initially focusing on commercial off the shelf components they have now increasingly migrated to taking more control smartly and to vertically integrate right to the payload level. “We have in-house ability to manufacture Earth Observation optical and RF sensing ourselves. For smaller satellites, in the 50 kgs class and above, we wanted more control over our destiny, and create a differentiator.”
Tony Gingiss, CEO, Millennium Space Systems said that when his company was founded the components frequently didn’t exist in the marketplace at a price point that was compelling. “There is a case for outsourcing, but you have to ask whether you can get good value from those suppliers. If you have scale then outside sourcing is a possibility. But where we are today, and not building hundreds of satellites then it is a question of ‘cost benefit analysis’. Building in-house gives you a great deal of control over your own destiny, how you plan and develop, and you are not at the whim of others. Indeed, there may not be a right answer to the dilemma.”