--- title: "An Invisible Industrial Web: Deconstructing SpaceX's Supply Chain" type: "News" locale: "en" url: "https://longbridge.com/en/news/288383790.md" description: "Sinolink Securities provides an in-depth deconstruction of the Starlink supply chain: Beneath the veneer of vertical integration, Filtronic derives 80% of its revenue from SpaceX, while STMicroelectronics has delivered 5 billion chips covering tens of thousands of satellites. Commercial components are systematically disrupting aerospace costs, with the value share of communication payloads set to rise to 70%. However, the threat of internalization through SpaceX's self-built factories is quietly closing in on every core supplier" datetime: "2026-06-02T07:45:41.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/288383790.md) - [en](https://longbridge.com/en/news/288383790.md) - [zh-HK](https://longbridge.com/zh-HK/news/288383790.md) --- # An Invisible Industrial Web: Deconstructing SpaceX's Supply Chain SpaceX’s dominance in commercial spaceflight is not simply equivalent to "doing everything in-house." Beneath the surface of its vertical integration, where over 80% of manufacturing is internal, an external supply chain network woven by semiconductor manufacturers, RF experts, photovoltaic producers, and industrial gas giants remains indispensable. According to Sinolink Securities' latest research report, a systematic breakdown of the Starlink satellite bill of materials (BOM) reveals three structural trends in SpaceX's supply chain: **the comprehensive replacement of traditional space-grade components with Commercial Off-The-Shelf (COTS) parts, the continuous rise in the value share of payloads driven by economies of scale, and the breakthrough of supply chain ceilings by replacing scarce resources with cheap bulk raw materials.** At the level of key suppliers, UK-based RF company Filtronic has become highly dependent on the SpaceX ecosystem. In 2024, the two parties signed a £47.3 million supply agreement, with SpaceX contributing approximately 83% of Filtronic's annual revenue. Simultaneously, SpaceX received warrants to purchase up to 10% of Filtronic's shares at a fixed price of 33 pence. STMicroelectronics (STM) has collaborated with SpaceX for over a decade. According to joint disclosures in December 2025, their cooperative products cover more than 10,000 Starlink satellites and millions of ground terminals, with cumulative deliveries exceeding 5 billion RF antenna chips. STM's annual revenue from LEO terminal BOM business has grown from $175 million in 2021 to approximately $600 million currently. The scaling process of satellite manufacturing is reshaping the BOM structure. During the traditional customized production phase, the cost ratio of satellite platforms to payloads was approximately 50:50. As capacity at SpaceX's Redmond factory climbs to about 70 satellites per week, the fixed costs of satellite platforms are significantly amortized. Sinolink Securities expects this ratio to compress to 30% for platforms and 70% for payloads. **This means communication payloads will become the largest source of value addition in the satellite industry chain, significantly elevating the strategic status of components such as phased array antennas and RF chips that directly determine satellite communication functions.** For investors, Sinolink Securities recommends focusing on three types of targets: Tier-1 core suppliers directly bound to the SpaceX satellite system; hidden champions solving specific pain points in high-frequency communication; and manufacturing giants breaking traditional aerospace premiums with low-cost industrial-grade products. However, these sectors face three major risks: backlash from SpaceX's internalization, geopolitical shifts in supply chains, and the risk of missing out on technological routes. ## Beneath the Veneer of Vertical Integration: External Dependencies Remain Critical SpaceX's vertical integration in satellites is mainly reflected at the system integration level: Core attitude control components such as Hall thrusters, star trackers, and reaction wheels are independently developed and manufactured; solar arrays are serialized, laminated, and assembled internally; and beamforming ASICs for phased array antennas are either self-developed or deeply customized by SpaceX. However, in areas such as underlying semiconductors, RF components, bare photovoltaic cells, and industrial gases, SpaceX remains heavily reliant on external professional suppliers. STM32 series microcontrollers are widely distributed across various control nodes of the satellite. Automotive-grade and industrial-grade power management chips (from TI, STM, MPS, etc.) handle power management functions. Commercial MEMS inertial sensors assist in attitude determination, while silicon-based solar cell bare dies form the upstream foundation of the Starlink power system. The core logic of this architecture is: **SpaceX does not pursue 100% self-manufacturing but maintains complete control at the system integration level, while shifting the procurement of underlying components to the lowest-cost industrial or commercial suppliers, compensating for the inherent deficiencies of commercial devices with system-level fault tolerance.** ## COTS Substitution: Industrial Logic Disrupts Aerospace Costs The traditional aerospace industry relies on expensive, customized radiation-hardened components. The price of a single specialized chip is often dozens or even hundreds of times higher than its commercial counterpart, with older processes and lagging performance. SpaceX has systematically broken this paradigm. In the field of solar cells, traditional space-grade triple-junction gallium arsenide cells have an efficiency of about 30%, but costs exceed $200/watt, with global annual capacity in the single-digit megawatts. **SpaceX instead purchases commercial silicon-based solar cell bare dies, completes space-grade modifications internally by adding special protective glass, and sacrifices some conversion efficiency in exchange for an order-of-magnitude reduction in cost.** In power management and control systems, SpaceX extensively adopts STMicroelectronics' STM32 series MCUs and industrial-grade power management chips from suppliers like TI, replacing traditional dedicated radiation-hardened devices in aerospace. To ensure on-orbit reliability, SpaceX employs triple modular redundancy design, physical aluminum/tantalum shielding, and software watchdog mechanisms, substituting system-level architectural fault tolerance for the radiation hardness of individual components. The scale effect of this logic is profound. For the planned constellation of 42,000 satellites, even minor changes in the BOM cost per satellite, multiplied by the constellation scale, can result profit differences worth billions of dollars. ## From Krypton to Argon: First Principles of Raw Materials The switch of propellant in electric propulsion systems is the most intuitive microcosm of SpaceX's supply chain logic. **The argon Hall thruster used in Starlink V2 Mini satellites is the first mass-produced argon electric propulsion engine in human history, independently developed and manufactured by SpaceX's internal team at the Redmond factory. With a thrust of 170mN and a specific impulse of 2500 seconds, its cost is only a fraction of traditional xenon/krypton solutions.** The core logic behind switching to argon is not merely a technical preference but a first-principles judgment on supply chain security: Global annual production of krypton is extremely limited. If tens of thousands of satellites continued to use this scarce gas, SpaceX's demand alone would surpass global supply, leading to skyrocketing costs or even supply cuts. Argon, however, is a abundant by-product of air separation, with ample production and low prices. Although argon has lower thrust efficiency as a propellant compared to krypton and requires more electricity, SpaceX's solution is to equip V2 Mini satellites with larger-area solar arrays, exchanging cheap electrical energy for expensive, scarce gases. This is a typical practice of its principle of "replacing expensive resources with cheap ones." Regarding industrial gas procurement, Sinolink Securities analysis suggests that Linde Group may be one of SpaceX's most critical partners currently. In 2025, Linde announced a $100 million investment to build an air separation plant in Brownsville, Texas, just miles from SpaceX's Starbase, allowing direct supply of liquid oxygen, liquid nitrogen, and argon via pipelines or short-haul transport. Air Products and Air Liquide may also participate in supply around launch sites in Florida and California. ## Communication Payloads: Deep Binding with Three Core Suppliers Communication payloads are the core subsystem of Starlink satellites with the highest cost and deepest technical barriers. Currently, their value share accounts for nearly 50% of the entire satellite BOM and is expected to approach 70% with mass production. Filtronic, STM, and UMT have deeply locked in their supply chain positions from the dimensions of RF amplification, semiconductor suites, and passive components, respectively. Filtronic's core value lies in solving the high-power amplification problem of E-band (71-76GHz and 81-86GHz) feed links. Its core product, the Cerus 32 solid-state power amplifier, uses compound semiconductor (GaAs/GaN) chips. Compared to traditional traveling-wave tube amplifiers, it is smaller, lighter, and requires no warm-up, fitting the deployment needs of mass-produced LEO satellites. After signing a £47.3 million supply contract with SpaceX in 2024, SpaceX simultaneously received warrants. Currently, Filtronic is continuously expanding production at its Sedgefield factory in the UK and has opened a dedicated fast-production line for SpaceX orders. STMicroelectronics (STM) is the semiconductor manufacturer with the widest coverage in the Starlink supply chain, spanning four major subsystems in a single satellite: STM32 series MCUs are distributed across various control nodes of the onboard computer; industrial-grade MEMS sensors (gyroscopes, accelerometers) are integrated into inertial measurement units, driving Hall thrusters and reaction wheels; it provides power bias and clock distribution chips in the peripheral circuits of communication payloads; and its PMICs and DC-DC converters are widely used in power management systems. According to STM's own forecasts, its LEO terminal BOM business revenue will increase to approximately $2 billion by 2028 and further reach about $2.9 billion by 2030. UMT's core competitiveness lies in high-frequency microwave passive components, with products covering L-band to E-band, including rectangular waveguides, filters, orthomode transducers, and antenna feeds. In communication links where high-frequency signals are prone to interference, UMT products act as "traffic police," precisely filtering unwanted frequencies and separating orthogonal polarization signals. It has become a Tier-1 or strategic supplier for SpaceX and Amazon Kuiper, with some key components holding exclusive or hard-to-replace status, and LEO satellite business accounting for a high proportion of its total revenue. ## Power Systems: Deepening Silicon Substitution and Internalization Layout of Self-Built Factories All versions of Starlink satellites adopt a configuration of solar arrays combined with high-capacity batteries. SpaceX completes the entire manufacturing process of solar arrays internally—cell serialization, vacuum lamination, protective glass coverage, and array assembly. The main confirmed external supplier of bare battery cells is currently TSEC from Taiwan, China. Cooperation between TSEC and SpaceX gradually deepened around 2021, with TSEC investing NT$900 million in new solar cell and module production lines that year. In terms of technical reserves, TSEC is actively laying out N-Type TOPCon, HJT heterojunction, and perovskite tandem technologies, planning to achieve mass production by 2028. This aligns highly with SpaceX's future direction of higher power requirements, and its products have been verified through long-term on-orbit operation of Starlink. However, SpaceX is building an internal Solar Cell Factory in Bastrop, Texas, recruiting for about 16 professional positions such as metallurgical engineers and wet process engineers. The goal is to fully autonomously produce solar cells, completely eliminating dependence on overseas suppliers. This poses a realistic internalization risk to external battery suppliers like TSEC. Meanwhile, according to Sinolink Securities' report, by the end of 2024, SpaceX had requested suppliers in certain regions to transfer manufacturing capacity to Southeast Asia and other locations to disperse geopolitical risks, and TSEC may have also participated in related capacity layout adjustments. ### Related Stocks - [SPCX.US](https://longbridge.com/en/quote/SPCX.US.md) - [FTC.UK](https://longbridge.com/en/quote/FTC.UK.md) - [DXYZ.US](https://longbridge.com/en/quote/DXYZ.US.md) - [ASTS.US](https://longbridge.com/en/quote/ASTS.US.md) - [RKLB.US](https://longbridge.com/en/quote/RKLB.US.md) - [SATS.US](https://longbridge.com/en/quote/SATS.US.md) - [PL.US](https://longbridge.com/en/quote/PL.US.md) - [VCX.US](https://longbridge.com/en/quote/VCX.US.md) - [STHH.US](https://longbridge.com/en/quote/STHH.US.md) - [600109.CN](https://longbridge.com/en/quote/600109.CN.md) - [STM.US](https://longbridge.com/en/quote/STM.US.md) - [TXN.US](https://longbridge.com/en/quote/TXN.US.md) - [MPWR.US](https://longbridge.com/en/quote/MPWR.US.md) - [LIN.US](https://longbridge.com/en/quote/LIN.US.md) - [LIN.DE](https://longbridge.com/en/quote/LIN.DE.md) - [APD.US](https://longbridge.com/en/quote/APD.US.md) - [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md) - [STMEF.US](https://longbridge.com/en/quote/STMEF.US.md) ## Related News & Research - [Forget the SpaceX IPO – Own These 3 Stocks Instead](https://longbridge.com/en/news/288467813.md) - [BRITAIN'S MILITARY HAS STARTED USING SPACEX'S STARSHIELD, TWO SOURCES SAY](https://longbridge.com/en/news/288444438.md) - [The 180-Day Lease Holding Up SpaceX's $2 Trillion IPO](https://longbridge.com/en/news/288095214.md) - [SpaceX says it will reserve 5% of its IPO shares for staff, friends and family](https://longbridge.com/en/news/288297530.md) - [MORE THAN 1,000 PRESENT AND PAST SPACEX EMPLOYEES JOIN FORCES IN A NEW INITIATIVE.](https://longbridge.com/en/news/288456923.md)