- Nov 29, 2023
The Rising Space Sector in China’s Silicon Valley
Shenzhen is a city that holds a special place in my heart. Having spent around six years of my life in Mainland China, around five of them were in the southern metropolis just across the border from Hong Kong. I have countless fond memories of the city, and it played an important role in my developing an understanding of China. The city has garnered a reputation as “China’s Silicon Valley,” at least for hardware (arguably Beijing’s Zhongguancun takes the title for software), and is home to a number of leading Chinese companies.
Historically, including for most of my time there, Shenzhen had a pretty limited space sector, which is a little bit surprising given that it is the electronics center of the world. With all respect to fans of Akihabara in Tokyo, there is perhaps nowhere else in the world that is as good for building electronic gadgets—from IoT sensors to, in theory, satellites—than Shenzhen. If you want to learn more, check out Huaqiangbei, the world’s largest electronics market.
Digressing, and grossly oversimplifying, Shenzhen has punched above its weight in everything that has to do with electronics, except the realm of space. In recent years, however, this has started to change, and one area where this is apparent is the China Hi-Tech Fair, which takes place every November in the city, where space has become a bigger draw.
The China Hi-Tech Fair (HTF) is one of the oldest technology-focused trade exhibitions in China, dating back to 1999. Held in Shenzhen, the fair is spread over more than 10 exhibition halls, and attracts more than 500,000 attendees per year. With exhibition halls ranging from consumer electronics to smart cities to electric vehicles, the China Hi-Tech Fair is massive, and brings in talent, investors, and knowhow from a wide variety of tech-related sectors.
Since the late 2010s, the China Hi-Tech Fair has also been home to an aerospace and space sub-forum and exhibition area, typically featuring local Shenzhen space companies alongside a handful of other national ones, and a day or two of space industry panel discussions. This year’s China Hi-Tech Fair saw the presence of the usual suspects, but also saw stirrings of dynamism, with newish Shenzhen space company APT Mobile Satcom playing a bigger role, and with a number of commercial firms from other provinces making their way to China’s Silicon Valley.
2023’s HTF Space Session: APT Shenzhen Stealing the Show
The major highlight from the space industry at the 2023 HTF was the grand opening of the company’s new headquarters, the APT Mobile Satcom Tower in Shenzhen’s Bao’an District, which took place just a couple of months before the HTF. APT Mobile Satcom is a geostationary satellite operator based in the city, and a partial subsidiary of APT Satellite Hong Kong, itself a subsidiary of Chinese state-owed space megacorporation CASC.
The company’s new HQ building is a beast of a structure, with some 700,000 square feet of office space spread across an ultramodern office building in one of the higher-rent areas of Shenzhen, one of China’s highest-rent cities. As a result of building and opening a brand-spanking new office building, APT Shenzhen got some special attention during the conference, with city Mayor Qin Weizhong and Vice Mayor Wang Shourui coming to their booth to better understand the company’s ambitions. And boy do they have some ambitions.
A brief rabbit hole: GEO high throughput capacity in China is largely a two-horse race, with China Satcom developing a regional, then eventually global Ka-band system, and APT Shenzhen/Hong Kong developing a regional, then eventually global Ku-band system. In the case of the latter, Apstar-6D and Apstar-6E have both launched, bringing a total of nearly 100 Gbps of Ku-band capacity into APAC, Apstar-6E thruster issues notwithstanding. APT Shenzhen, partially via its partner/shareholder APT Hong Kong, have done well to commercialize much of this capacity via IFC anchor customers such as Panasonic. The completion of a new HQ is a new crown jewel in the growing empire of Ku-band GEO-HTS, and may also indicate the start of another business line for APT Shenzhen: landlord.
With so much space available, APT Shenzhen simply does not have enough people to fill their building. And so, during the HTF, APT Mobile Satcom Shenzhen announced deals with several commercial space companies for office space in their new tower, including VSAT manufacturers Cowave and NTF Satellite Technology, as well as digital mapping firm NTF Satellite Technology. While still a relative newcomer, APT Shenzhen has significant political backing (it’s also a partial China Satcom subsidiary) and a brand-spanking new office building, so they might have the early ingredients of a space industry cluster.
Separate from APT Shenzhen, the other state-owned player with significant presence at HTF was Shenzhen Aerospace Dongfanghong, a CAST subsidiary with a focus on satellites with mass of 300kg or less. Shenzhen Dongfanghong (Shenzhen DFH) has been HQed in Shenzhen for more than 10 years, and has played a major role in a variety of Chinese state-run missions. Today the company finds itself in a somewhat awkward position. Historically, Shenzhen DFH has been the “more commercial” subsidiary of CAST, as compared to its Beijing sister company, Beijing Dongfanghong. With its commercial orientation and focus on small satellites, Shenzhen DFH is now finding itself competing with all manner of even more commercial upstarts, even for certain government missions.
Startups on display
Beyond the two big state-owned/partially state-owned enterprises at the China Hi-Tech Fair, we saw several startups displaying specific technologies that exemplify the deepening of China’s commercial space sector.
EDrive Space was displaying a variety of next-generation thrusters, which not only look pretty slick, but have been put into practice on the Qiankun-1 satellite, as well as the Tianmu-1-10 satellites. Having been founded in April 2020, the company has already developed thrusters capable of serving satellites with masses of 20-1000kg, delivering on-orbit lifetime of 3-10 years. EDrive Space is but the latest example of a Chinese commercial space company focusing on subsystems-level and/or systems-level solutions, rather than an entire satellite.
Finally, local satellite manufacturer Magic Cube had a substantial booth, showcasing their variety of components and systems, as well as satellites. This included the company’s gallium arsenide solar arrays, which are some of the first to be developed by commercial Chinese space companies. Founded in 2018, Magic Cube flew under the radar for several years, but has since become much more prominent with its involvement in the Tianmu satellites, of which 10 have launched this year (and on each of them, an EDrive Space thruster). During a panel discussion on satellite internet, Magic Cube General Manager Ding Qiangqiang noted that the company sees industrialized and mass-produced smallsats as the future, especially in large-scale industries such as satellite direct-to-device. Headquartered in Shenzhen, Magic Cube will undeniably have access to world-beating supply chain in their mission.
What to Expect from Shenzhen Moving Forward?
I might be biased, but frankly, I would expect big things from Shenzhen’s space sector moving forward, assuming that the wheels stay on the Chinese space sector more broadly. The city is one of China’s wealthiest, with an open-minded government, extremely strong talent base, and a bunch of world-leading companies (including Huawei, ZTE, Tencent, and others).
Their space industry has thus far been limited, but we are seeing some serious green shoots. And a factor that we did not discuss at all here, which may become important moving forward, is a social/political one. In China, they say that the “mountains are high and the emperor is far away,” that is, the further one is from Beijing, the more one has room to maneuver. Shenzhen, as a southern metropolis far from Beijing, feels a lot more open and a lot less repressed than the capital.
Rocket scientists and satellite engineers haven’t come to Shenzhen in droves yet. But the operative word there might just be yet.