Hon Hai Precision Industry Co., also known as Foxconn, has successfully launched two prototype low-Earth orbit (LEO) satellites on a SpaceX rocket from California. This significant moment for the Taiwanese electronics manufacturer represents its move into new sectors amid struggles in its established businesses, such as smartphones and laptops.
The LEO satellites, developed in collaboration with Taiwan’s National Central University, are around the size of a backpack and weigh approximately 9 kilograms each. They contain cameras, communication devices, and other equipment, and are designed to orbit Earth every 96 minutes at an altitude of 520 kilometers.
Foxconn aims to demonstrate its satellite technology capabilities to meet the growing demand for communications from space. While SpaceX has already deployed over 5,000 LEO satellites for its Starlink constellation, Foxconn believes it can manufacture satellites primarily for corporate and government clients.
Since taking over as Chairman in 2019, Young Liu has led Foxconn’s diversification efforts into electric vehicles, digital health, robotics, artificial intelligence, semiconductors, and now, communications satellites. The company is looking for new avenues of growth, as its revenue is expected to decline by around 6% this year.
While Foxconn is a major manufacturer of iPhones, the LEO satellite business offers less predictability due to the infrequency of orders. However, government orders could provide some stability for Foxconn as it expands its satellite operations. Additionally, Foxconn’s expertise in electronics and previous experience manufacturing smartphones and other devices should benefit its foray into space communications.
Taiwan is also working on launching its first LEO communication satellite, part of its strategy to develop space-based alternatives to undersea cables. Furthermore, Foxconn’s electric-vehicle business could support its satellite venture, as real-time communication technology is essential in this industry.
Overall, Foxconn’s move into space communications represents a strategic effort to diversify its business and secure future growth opportunities.