TAMPA, Fla. — Providers of the subsystems and components needed to support a surge of proposed satellites are set to drive deal activity into 2024, according to space investors speaking during the Satellite Innovation conference Oct. 17.

“There’s going to be tens of thousands of satellites launched into space in the foreseeable future,” said Tyler Letarte, vice president of AE Industrial Partners, which has invested in space companies including Firefly Aerospace and Redwire.

“Every single one of those satellites needs propulsion system, everyone needs batteries, needs computing power — especially if we start bringing up autonomy and edge computing in space.”

A need for more computational power in orbit will increase demand for next-generation communications systems, Letarte said, including optical communications terminals.

Satellite subsystems “are definitely areas of focus for us,” he added, “and we would expect to be areas of focus for other investors.”

Governments are also spending billions of dollars on satellite network equipment to upgrade their space-based capabilities.

Karl Schmidt, managing director at investment bank KippsDeSanto & Co., pointed to a half-a-billion dollar contract the U.S. government recently awarded to upgrade satellite communications equipment for the Marine Corps.

The “Army is going to be right on the backside of that,” Schmidt said, “upgrading terminals and gateways. So I would tell you, on the satcoms side, we’re going to continue to see a lot of activity.”

Defense primes that missed the boat for such sizable, long-lead contracts awarded over the last few years could turn to acquisitions to snap up these customer relationships, Letarte said.

Investors are also turning their attention to businesses that provide more granular components that could be used for space-based networks.

There are four sales in the market this year for power amplifier businesses alone, according to Schmidt, two of which have been announced: Aethercomm’s sale to Frontgrade Technologies and Comtech’s divestment of assets to Stellant Systems.

Jason Rainbow writes about satellite telecom, space finance and commercial markets for SpaceNews. He has spent more than a decade covering the global space industry as a business journalist. Previously, he was Group Editor-in-Chief for Finance Information...