LEO satellite boom fuels Filtronic’s growth

• UK wireless tech company Filtronic is benefitting from its strategic partnership with Elon Musk’s SpaceX
• The British vendor has a five-year deal to supply amplifiers to SpaceX for its Starlink low-earth orbit (LEO) satellites
• SpaceX has already placed initial purchase orders for Filtronic’s E-band solid state power amplifier designed for use in LEO data communications and pledged to an ‘order flow’ over the coming years 
• Filtronic’s share price has ramped up and the company now expects its financial performance to be ‘ahead of current market expectation’ for the current fiscal year

It’s not often we get to report on a British communications network technology success story, so as summer gently dwindles and the season of ‘mists and mellow fruitfulness’ (aka autumn) starts to take hold, it’s a delight to see that a small wireless networking vendor based in the north-east of England has developed technology that is set to play a pivotal role in the low-earth orbit (LEO) satellite broadband deployments currently underway by Starlink, part of Elon Musk’s SpaceX enterprise.

That vendor is Sedgefield, County Durham-based Filtronic, a specialist in the development, design and manufacture of wireless communications technologies (including radio frequency, microwave and mmWave), which in April this year signed a strategic partnership agreement with SpaceX for the supply of E-band solid state power amplifier (SSPA) technology to be used on the Starlink satellites, which are delivering broadband services to users in areas that are hard to reach by terrestrial network operators. 

As part of that agreement, SpaceX committed to initial orders worth $19.7m and “ongoing orders for the next five years to ensure Filtronic remains a key part of its supply chain,” while the UK vendor committed to working collaboratively with Starlink to develop and deliver wireless technology products across the multiple frequency bands to be used for services delivered by the Starlink constellation.

The long length of the partnership has enabled Filtronic to upscale its manufacturing base and build-in extra capability both in R&D and product production. 

In July, Filtronic received its first “irrevocable order”, valued at $9m, followed by a follow-on purchase order for more E-band SSPA modules, announced on 30 August, worth $8.4m.  

Both contracts are part of the initial $19.7m commitment from SpaceX, but the latest follow-on order is prima facie evidence that the company’s products meet Starlink’s stringent technical requirements and show that Filtronic has secured a position as a core supplier of specialist comms technologies to Starlink for the foreseeable future. As Filtronic’s latest press release states, ”this latest order underscores the trust and confidence SpaceX has placed in Filtronic’s cutting-edge technology and engineering expertise, further solidifying their collaboration in advancing space communications infrastructure,” and is “a testament to the successful delivery of previous projects.”

Nat Edington, CEO of Filtronic, stated: “We are delighted to continue our journey with SpaceX, which reflects the strong and growing relationship between our companies. At Filtronic, we are committed to pushing the boundaries of what’s possible in RF [radio frequency] and microwave technology, and our work with SpaceX allows us to do just that. This follow-on order further validates the performance and reliability of our products but also highlights our agile culture and ability to meet the demanding requirements of one of the world’s most innovative companies.”

In recent years, Filtronic has focused on the development and manufacture of transceivers for use in E-Band point-to-point radio links, which operate in the millimetre-wave frequency ranges of 71 - 76GHz and 81 -86GHz. These are widely used in high-capacity backhaul, midhaul and fronthaul (collectively known as XHaul) links up to 10Gbit/s for use in 5G mobile networks, as well as in high altitude platform stations (HAPS).

The products being supplied to Starlink are based on the Cerus32, Filtronic’s high-performance E-band SSPA for use in high-capacity wireless networks, including LEO satellites designed for broadband connectivity. Filtonic says the Cerus 32 “continues to be the most powerful E-band SSPA commercially available on the market, with up to +43dBm of transmit power.” The Cerus 32 module features Filtronic’s in-house monolithic microwave integrated circuit (MMIC) chip design and power-combining techniques, delivering maximum linear power. The high-power SSPA can be applied in a range of applications and is specifically suitable for commercial, military and satellite communications applications.

The good news for Filtronic is that not only does SpaceX clearly value and trust its technology, but the Starlink constellation is still only in its early stages of deployment – currently there are just over 6,300 Starlink satellites in orbit but the constellation could grow to be as large as 42,000 ‘birds’, with each satellite boasting a lifespan of about five years before it needs to be replaced. 

The SpaceX deal has done wonders for Filtronic’s financials: Its share price has rocketed (geddit?) by almost 300% this year on the London Stock Exchange Alternative Investment Market (AIM) and currently stands at 80 pence. Confirmation of the latest purchase order led the UK vendor to note that “the order will be fulfilled in calendar year 2025. Consequently, we now expect to trade ahead of current market expectation for [fiscal year] 2025,” which ends next May. The existing revenues forecast for the year is £35.1m, but the company hasn’t identified a new improved forecast number as yet. 

Whatever the number, Filtronic looks to have a secure commercial future for many years to come, to the benefit of the company, its workers (currently 130-plus), the region and the UK in general – as well as SpaceX/Starlink. 

– Martyn Warwick, Editor in Chief, TelecomTV