The Supply Chain Crisis That Never Arrived
Why Production Delays Haven’t Crippled Constellation Deployment (Yet)
Faced with 18-month lead times for optical inter-satellite links and radiation-hardened processors in late 2022, satellite manufacturers confronted a binary choice: wait for global supply chains to heal or rebuild them from scratch. They chose the latter—and the numbers tell a story few industry observers predicted.
Despite widespread forecasts of significant deployment slowdowns through 2024, constellation operators hit 94% of their planned launch targets. SpaceX alone launched 96 missions in 2023, more than the rest of the world combined. OneWeb completed its 648-satellite first-generation constellation by 2023 on schedule. Even Planet Labs maintained its refresh cadence, rotating aging satellites out of orbit while bringing replacements online at pace.
The supply chain crisis everyone predicted? It materialized—just not where it mattered most. Component shortages were real and lead times stretched from weeks to quarters. Critical suppliers like Mynaric, the German manufacturer of optical communication terminals, teetered on the edge of insolvency before Rocket Lab acquired them in 2024. But the expected cascade of launch delays, half-built satellites waiting on components, and investor panic never arrived for commercial operators.
What did arrive instead was something McKinsey’s 2020 constellation analysis didn’t anticipate: a parallel manufacturing economy built on vertical integration, strategic stockpiling, and design simplification that not only kept production lines moving but created competitive advantages that persist today. The workarounds aren’t temporary. They’re the new baseline for constellation economics, and they’re widening the gap between operators who control their manufacturing destiny and those still dependent on fragile global supply webs.
The exception proves the rule. The Space Development Agency—constrained by government procurement regulations that prevent the kind of manufacturing flexibility commercial operators deployed—saw its Tranche 1 satellite constellation delayed by precisely the supply chain issues that SpaceX and OneWeb sidestepped. The lesson isn’t that supply chain risks were overblown. It’s that strategic manufacturing decisions mattered more than macroeconomic headwinds.
The Vertical Integration Gambit
When SpaceX started building satellites in-house at its Redmond, Washington facility in 2015, industry veterans dismissed it as Elon Musk hubris. Traditional aerospace wisdom held that prime contractors should focus on systems integration, not component manufacturing. Let specialist suppliers handle propulsion, avionics, solar arrays, and communication systems. Spread the risk. Leverage economies of scale across multiple customers.
