Financing Supplier Capacity
Why don't suppliers simply build more capacity, and who pays for it?
Chapter summary
because the economics of a space component line are hard.
Key takeaways
- 1
A new qualified line for optical terminals, rad-hard processors or III-V cells costs tens to hundreds of millions of dollars, takes three to five years to qualify, and then depends on orders from a handful of buyers who may integrate, delay or cancel.
- 2
Suppliers therefore expand only when demand is contracted, not merely visible.
- 3
Capacity has been financed by four sources: supplier balance sheets (Azur Space's expansions), acquirers (Rocket Lab's purchases), governments (DPA, CHIPS, SDA funding) and customers through prepayments or co-investment.
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