Infinio Capital, an early stage venture capital firm based in both Taiwan and the US, has been a hidden linchpin of Taiwan’s global space ambition. Focused on the ever-growing commercial space industry, the venture capital is now raising a US$150 million fund to dive further into the space economy, and its managing partner, Eric Lin, firmly believes that Taiwan can be a leading manufacturer of the global space industry. However, facing growing competitions from South Korea and India, Lin indicated that Taiwan had to secure its place within the global space supply chains within five years in order not to lag behind.
Taiwan crucial to SpaceX supply chain
In fact, when SpaceX came to Taiwan in search of suppliers three years ago, Infinio Capital was crucial to navigate Elon Musk through Taiwan’s electronics manufacturing industry. Traditionally suppliers of the global PC, server and mobile markets, Taiwan’s contract manufacturing industry has also been searching for new growth areas, especially in the EV and space sectors, in which Taiwan’s electronics and semiconductor industry already has certain advantages. The stringent thermal requirements shared by the automotive and space sectors have also made it easier for those entering the former sector to expand into the space industry.
For example, Foxconn, the world’s largest electronics contract manufacturer, not only ventured into the EV industry, but also expressed interest in the Low Earth Orbit (LEO) satellite market, coming into contact with SpaceX in 2018 as its representatives visited Taiwan.
According to Lin, even though Taiwan has less relevant resources compared to South Korea and India, Taiwan has the most complete and mature supply chain suitable for the space industry. Above all, Taiwan’s superb cost reduction ability was one of the reasons driving SpaceX to outsource its ground equipment manufacturing to Taiwan. It took eight months to convince SpaceX to outsource its manufacturing process though, as Lin put it. The decision was nevertheless proven beneficial. Elon Musk regarded it a major challenge to reduce the costs of ground equipment.
Dozens of Taiwanese electronics manufacturers have already hit into the SpaceX supply chains, including MTI Technology Corp., Chimei Innolux Corp., and Universal Microwave Technology. With Starlinks’ service rumored to be available in Taiwan as early as in 2022, only more Taiwanese companies will seek a share of the lucrative market.
Setting the standards for IoT in space
To increase Taiwan’s role in global space industry, however, its manufacturing industry has to move beyond ground equipment, and that is precisely what Infinio Capital has been working on in cooperation with Taiwan’s National Space Organization, Taiwan’s coordinator of space industry development. With its international strategic partners, Infinio is seeking to facilitate the launch of two or more domestically built nano-satellites within two years, before putting them into volume production, with an estimated annual production capacity of 20-40 satellites.
The emergence of LEO satellites, with their shorter lifespans, has created an unprecedented opportunity for Taiwanese electronics manufacturers long barred from the space industry’s long product development cycle, especially the highly complicated, customized and thus cost prohibitive nature of traditional satellites. Their similar lifespans to mobile handsets also mean that electronics suppliers can now develop a business model for the satellite industry with steady revenues akin to that of smartphones, easing their transition into the sector.
Setting its sight on the future, Infinio Capital also looks beyond the manufacturing industry, believing that future growth in the space sector will stem from its applications in terms of telecommunications and IoT. Taiwan’s technology industry, in this context, should join the race in setting the hardware and software standards for future satellites. After all, according to Eric Lin, manufacturing and rocket launch only represent less than one third of the space industry’s total output. Nevertheless, at the current stage they are the inevitable focus of the fund – without the necessary infrastructure, it is impossible for Taiwan’s space industry to take off.
As of 2019, there were 898 companies in Taiwan related to the space industry. Most of them were ground equipment suppliers, specialized in antennas, communication modules and power supplies. Since Taiwan has no prior experience of manufacturing LEO communications satellites, the Ministry of Science and Technology has started a four-year, US$142 million project to launch its first LEO communications satellite in 2025. Over-dependence on governmental budget, as one industry insider puts it, had however rendered it hard to for the public sector to allocate budgets with flexibility. Capitals from the private sector, like Infinio Capital, are precisely what Taiwan’s space industry needs the most.