Source: Pixabay

Taiwan has been looking to leverage its strong IC industry to launch itself into the space industry, especially eyeing the opportunities provided by cube satellites – a class of nano-satellites measuring approximately 10 cubic centimeters and weighing around 1 kg. 

“CubeSats”, as they are called, represent a convenient entry point for Taiwanese companies with limited prior experience in space, since they are low-cost and often use commercial off-the-shelf electronic components. 

Earlier this year, Taiwan’s CubeSats industry reached a milestone after MoGaMe Mobile Entertainment, a small Taiwanese company, successfully launched two satellites, YUSAT and IDEASSAT, in cooperation with a research institute. 

However, Taiwan’s venture into the space industry faces three fundamental challenges. 

No domestic launch capability  

Product validation is the entry ticket for Taiwanese suppliers to enter global space industry supply chains. In this regard, the lack of a launch site and a non-existent domestic launch industry leaves Taiwanese space companies no choice but to rely on foreign launch service providers. YUSAT and IDEASSAT, for instance, depended on SpaceX’s Falcon 9 rocket. 

The uncertainty created by such foreign dependence renders it hard to manage the product validation process. This, in turn, risks delaying a company’s R&D process. 

Meanwhile, issues with launch sites also impedes Taiwan’s main rocket startup, Taiwan Innovative Space Inc. (TiSPACE). The startup, aspiring to provide commercial launch service for small satellites, claimed to have successfully developed a hybrid rocket matching NASA’s standard of “Class-I Rocket Propulsion System”. 

It originally planned to launch its first hybrid rocket in late 2019, but land disputes repeatedly delayed its progress. Now, the company contemplates to access the launch facilities at Vandenberg Air Force Base, also SpaceX’s main launch site. 

Market unfamiliarity deters risk capital

A general lack of understanding toward the space market is another industry-wide issue, especially when market entrants are mostly SMEs or startups. The inability to pinpoint their positions in the global space market, in turn, deters risk capital. Most Taiwanese investors seek a short investment cycle and shun the costly R&D process inherent to the space industry with low return on investment. It is not just a phenomenon exclusive to the space launch sector. 

MoGaMe, for example, received NT$1 million to fund the R&D activities for the two previously mentioned nano-satellites. In the end, the company had to spend an additional NTD 3 million on the project via additional funding sources. Likewise, its project partner, National Central University, had to raise an additional NT$10.8 million, despite receiving an initial fund of NT$9 million. 

Odysseus Space, another participant in the project, also faced a similar challenge. Recognizing Taiwan’s strengths in IC, its French founder Jordan Vannitsen decided to set up the company in Taiwan to explore the growth opportunities in Asia. Focusing on small satellite technologies, the startup faced repetitive funding difficulties in Taiwan, and only obtained NT$2.4 million from the Taiwanese government. Its trajectory also illustrated the hurdles faced by Taiwan to become an international startup hub. In 2019, three years after its founding, the startup moved its headquarters to Luxembourg after winning a US$570,000 prize from the country’s space agency. 

More than governmental coordination

The Taiwanese government places part of its hope on a draft Space Development Act, currently under legislative review, to coordinate industrial policies on the country’s space development. It would also facilitate the foundation of a national rocket launch site. 

Most important of all, the government hopes the Act, through subsidies and incentives, would facilitate the private sector’s participation in Taiwan’s space industry. So far, the government plays an outsized role in the sector. 

The government-owned National Space Organization (NSPO), with an annual budget of NT$2 billion, has been the only entity in Taiwan possessing the necessary toolkit to develop and test satellite equipment and launch systems. Consequently, it has become Taiwanese enterprises’ only gateway to space.

In the short term, governmental space initiatives might provide Taiwanese space companies valuable opportunities to validate their products. In the long term, nevertheless, its lack of scale will deter the private sector from further exploring the space industry.

 

 

Source: DigiTime, CommonWealth, BusinessNext, TechNews