STMicro Eyes $3B in Space Chip Revenue by 2028

Revenue Target and Market Reaction

STMicroelectronics announced it is targeting more than $3 billion in cumulative revenue for its semiconductor space business from 2026 to 2028. In response to the announcement, shares in the Franco-Italian chipmaker initially rose as much as 7% before settling 2.2% higher.

Overview of the LEO Satellite Market

The growth is primarily fueled by the expanding demand for chips used in low-Earth orbit (LEO) satellite networks. Companies like Starlink, AST SpaceMobile, and Amazon are broadening LEO communications from a niche sector to mass-market services. STMicro’s revenue from this segment is projected to grow from about $175 million in 2021 to nearly $1 billion in 2026.

Economic and Market Impact

STMicroelectronics aims to capitalize on its first-mover advantage, supported by a long-term supply partnership with Starlink and a near 90% market share. The company identifies China as a large opportunity for user terminals but is restricted from supplying satellite technology due to export controls, a factor that shapes its international strategy.

Summary and Outlook

The company is positioning itself to maintain its market leadership as the LEO satellite sector expands and attracts more competition. While orbital data centers are identified as a potential future market, related revenue has not been included in the current 2026-2028 financial targets, indicating further growth potential.

FAQ

Q: What is STMicroelectronics' revenue target for its space business?
A: The company is targeting over $3 billion in cumulative revenue from its space chip division between 2026 and 2028.

Q: What is the main driver for this projected growth?
A: The growth is driven by the increasing demand for semiconductors in low-Earth orbit (LEO) satellite networks for services like broadband and direct-to-cell communication.

Source: Investing.com