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Southern California suppliers learn to adjust to satellite orders



SpaceX catapulted six small commercial satellites into a near-Earth orbit on Tuesday. It was the 10th start of the company this year – but the payload itself could be a sign of what's coming.

Like many companies, Iridium Communications Inc. has developed a constellation of satellites. These smaller satellites will gradually replace the giants traditionally sent 22,000 miles above the earth.

Given this shift, SpaceX itself expects fewer satellites to be launched next year – some 20 from below as many as 28 this year – as orders for commercial geostationary satellite launches have dropped.

"The market has eased a bit," said SpaceX President Gwynne Shotwell in an interview on CNBC. Worldwide orders for school bus spacecraft operating at a fixed location in relation to the ground were typically 20 to 25 per year by 201

5, when they dropped to 17.

The change came to companies such as Alliance Spacesystems of Los Alamitos, which manufactures composite and lightweight structures for satellite components such as solar panels and antenna reflectors. Revenue declined 60 percent from $ 30 million in 2015 to $ 12 million in 2016. The company had fired "a good deal" of its workforce, including 54 of its 85 technicians, said Rick Byrens, senior vice president and General Manager of the Alliance. [19659003] "We have never experienced a downturn like 2016," he said.

Satellite suppliers were hit twice. Thanks to advances in technology, new geostationary satellites are more powerful than ever, so less is needed. At the same time, new types of satellites will be built to accommodate changing viewing habits.

SpaceX is one of the companies developing networks of hundreds or even thousands of tiny, lower-cost satellites to enable customers to access low-cost Internet access. [19659003] "So many of the services performed by the large, geostationary satellites can be handled well by some of these new, large constellations," said Marco Caceres, senior space analyst at market analysis firm Teal Group

Satellite industry experts say that the order numbers can be cyclical. The newest layer sent suppliers via California.

In 2015, the Torrance facility of L3 Electron Devices focused almost exclusively on space products. It says it is the only US manufacturer of a type of vacuum tube technology that amplifies radio signals through space. As the slowdown set in, management decided to connect the Torrance facility to work in another Northern California plant that, according to an L3 official, was producing the same technology for aircraft as General Atomics' Predator drone.

Today, space systems account for only about 40 percent of L3 Electron Devices' business.

Two weeks ago Maxar Technologies Ltd. announced. In Westminster, Colorado, analysts said during a quarterly earnings distribution that the company's revenue had fallen 5 percent. This is partly due to lower order totals and "persistent weakness" in the geostationary commercial satellite market.

Maxar Owns Satellite and Spacecraft Manufacturer SSL in Palo Alto and Earth Imagery Provider DigitalGlobe

Chief Executive Howard Lance told analysts he hopes Maxar will see "bottoming out" of the impact of the geostationary business, though He pointed out that the company was "It can be assumed that the satellite commands will remain at a 'lower level'.

The lower-level prediction shook Santa Barbara vendor Deployable Space Systems, who had relied on SSL for its advanced solar systems.

The company had been worried for about a year, said Brian Spence, president of Deployable Space Systems. But it was able to capture arrangements of solar systems for interplanetary and near-earth spacecraft.

Geostationary satellite operators have also begun to hedge their bets by entering the market for smaller, broadband satellites.

The Canadian operator Telesat announced plans to launch a near-Earth orbit constellation. The Japanese operator SKY Perfect JSAT Corp. in LeoSat Enterprises, located in Washington, D.C. which intends to provide up to 108 satellites for broadband access to businesses.

Allianz also sees opportunities in these new constellations. The parent company, SolAero Technologies Corp. based in Albuquerque, will produce solar modules for OneWeb's small-satellite constellation, and Alliance will be responsible for supporting the satellite solar arrays.

"It's obviously a huge program for our company." Said Byrens. "They go from a GEO (geostationary satellite), which is a satellite, to now 700 satellites." In fact, Alliance has declined this year, as its main customer, Boeing Co., has recently won several commercial geostationary satellite orders, it has prevailed in the high-capacity satellite market. Alliance has been able to recall many laid-off workers, and its engineering strength has returned to 102. Alliance has forecast sales of $ 38 million this year.

But not all suppliers will be able to finance the proposed constellations.

"If you talk about building 1,000 satellites at an affordable price, it will just be another supply base," said Jim Adams, aerospace engineering director at KPMG. "It's just different technologies."

Experts in the satellite industry say large commercial geostationary satellites are unlikely to ever completely disappear, and more complex satellites could mean that fewer orders generate more money. The more critical is the landing of every remaining order.

Government satellites, which were traditionally large, geostationary spaceships, are another lucrative source of revenue.

The government's communication satellites, however, are also changing to a new generation, said Forecast International aerospace analyst Bill Ostrove. And a new Pentagon Agency for Enhanced Defense Research Projects (DARPA) is calling on contractors to focus on small launcher vehicles, suggesting that the Department of Defense is also exploring the possibility of using small satellites.


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