Ladies and gentlemen, welcome to the STMicroelectronics: The LEO Opportunity Conference Call and live webcast. I am Sandra, the conference call operator. I would like to remind you that all participants have been listed in read-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing Star and One on your telephone. For operator assistance, please press Star and Zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Jérôme Ramel, EVP Corporate Development and Integrated External Communications. Please go ahead, sir.
Thank you. Thank you everyone for joining STMicroelectronics: The LEO Opportunity Conference Call. Hosting the call today is Remi El-Ouazzane, President, Microcontrollers, Digital ICs and RF products Group. This live webcast and presentation materials can be accessed on the STMicroelectronics Investor Relations website. A replay will be available shortly after the conclusion of this call. This call will include forward-looking statements that involve risk factors that could cause STMicroelectronics results to differ materially from management expectations and plans. We encourage you to review the safe harbor statement contained in the press release that was issued with the results this morning, and also in STMicroelectronics most recent regulatory filing for a full description of these risk factors. Also, to ensure all participants have an opportunity to ask questions during the Q&A session, please limit yourself to one question and a brief follow-up.
I'd like now to turn the call over to Remi El-Ouazzane.
Good morning and good afternoon, everyone. It's great to be with you today. As the space electronics market is becoming an increasingly important topic, we wanted to share ST perspective on the LEO opportunity, why it matters, and how it is translating into growth for our company. For us, and to use an aphorism, it's been a 10-year overnight success. We will look at the market momentum, the technology shifts, driving this expansion, and the pivotal role ST is playing and will play across the LEO ecosystem. Let's get started. I want to begin with the broader orbital infrastructure landscape. We can actually split it into two fairly distinct worlds. The first is traditional space. This includes exploration missions, as well as operation in geostationary and medium Earth orbits. This world remains very important for applications such as video broadcasting, radio broadcasting, meteorology, and GNSS.
These are established mission-critical domains. They are typically based on large satellites, have long-term development and life cycles, and follow highly predictable service models. The second world is what we call new space. This is mainly centered on low Earth orbit, and it is expanding rapidly into broadband connectivity, direct-to-cell services, and eventually orbital data centers. This segment is driven by smaller satellite, much faster deployment, lower latency, and entirely new business models aimed at individual users and mass adoption. This shift is not only about orbit altitude, it's really a change in the economics of space. It means a broader set of application, much higher deployment volumes, and much stronger semiconductor intensity.
On a light note, and in reference to the date we have selected for this event, maybe some of you have spotted a very special star on the upper left part of this chart that is at the very far end of the galaxy. Although we won't be discussing that type of object today, May the Fourth be with us throughout this presentation. ST has been active in space for more than 45 years. Over that time, our technology have supported the full spectrum of space application. On the traditional space side, we are in Eutelsat Konnect VHTS, Ariane launchers, and major exploration missions, including the Chinese moon lander Chang'e six and the NASA James Webb Space Telescope.
As such, it should not be a surprise that ST was also involved in new space from the very beginning, enabling with our technology the 1st generation of large-scale LEO programs, both in space and on the ground. Let me double-click on ST's LEO business. We have seen a very sharp increase in revenues from this business, reaching approximately $600 million in 2025, up from about $175 million dollar in 2021. That represents a CAGR of about 36%. This is a strong and solid performance that it position ST as the leading semiconductor players in the LEO market. Your estimates on RF market share for LEO at above 90% in 2025. We are just in the early innings of this market.
Later, I will explain how ST is positioned to sustain and extend this growth with our differentiated technology, our manufacturing strength, and the breadth of our portfolio. To understand why LEO is scaling so fast, we need to look at the technology and the economics behind the disruption. Three changes have made large-scale LEO constellations possible. First, the higher launch space of reusable rockets has allowed thousands of satellites to be put into orbit at a much more affordable cost. Let me share with you a number. The cost of launch per kilogram decreased from about $10,000 on Falcon one in the mid-2000s to $2,000 in the following decade with Falcon nine, and is expected to be divided by a further factor of 10 on Starship. Second, satellites themselves have changed.
They have now become lighter, more standardized, enabling at scale and faster manufacturing can now be launched in groups, for example, 25 per launch. They are increasingly embedding innovations such as software-defined digital payloads and inter-satellite optical links. Last, the user terminal has evolved dramatically. It has moved from a traditional parabolic antenna to electronically steered antennas leveraging beamforming, which can follow moving satellites and hand over from one to the next. These antennas are now produced very efficiently in very high volumes, where this was originally mostly at the beginning, a military technology. Together, those three shifts have created the new LEO economy, and that economy is large, it's scalable, and it's highly semiconductor intensive. The question is, how big can this become?
According to Gartner, LEO services spending is expected to reach close to $15 billion globally in 26 this year. It will continue scaling higher through three major services classes. The first and currently the most important is broadband service. Satellite broadband is connecting the unconnected and reducing the digital divide. It gives rural or poorly connected community access to high speed, low latency broadband. Think about this. While there is roughly 1.5 billion broadband users worldwide, today almost 3 billion people remain on the wrong side of the digital divide. It also provides connectivity and redundancy to corporates and governments and improve resiliency in the event of natural disaster. Because LEO constellation can cover the globe, they are particularly well suited for mobility applications such as in-flight connectivity, maritime connectivity, and even over time, automotive use cases.
The second growth engine which is emerging now is direct-to-cell. This connects phones or IoT devices directly to LEO satellite that effectively act like a cell tower in space. It opens the door to roaming-less connectivity, expanded IoT services like asset tracking, and helps eliminate mobile coverage holes. Finally, the next frontier is the orbital data center. This is still an emerging category today, but it points to a future where LEO is not just about connectivity. It could become a platform for compute at scale in orbit, benefiting from the nearly limitless availability of solar energy. This idea of orbital data center becomes more relevant as launch economics improve. As I previously mentioned, the cost per kilogram to orbit has fallen dramatically and will continue to do so, likely eventually down to below EUR 100 per kilogram at some point.
That trend makes more ambitious in-orbit compute concepts increasingly realistic over time. Take SpaceX, for instance. They have filed for 1 million satellites for this purpose. As Elon Musk put it, launching 1 million tons per year of satellite generating 100 kilowatt of compute per ton could eventually add 100 gigawatt of AI compute capacity annually with limited operational or maintenance needs. Jeff Bezos' Blue Origin with Project Sunrise also filed for FCC approval to support data centers in space, Google with its Project Suncatcher is engaged in very similar initiative. In short, LEO is evolving from a connectivity platform into a much wider ecosystem with multiple growth vectors both emerging in parallel. Continuing on the service expansion we just discussed, these opportunities have been amplified by rapid proliferation of LEO constellation, something important has changed.
The earlier space model was largely financed by public investment. Today, LEO is increasingly driven by massive private capital, which is accelerating constellation deployment, supporting new business models, and increasing the pace of launches. Because of the first examples of usage of today's LEO constellation, governments have understood the geopolitical impact of these services. As a result, LEO is increasingly becoming a global race. Constellations are being deployed across geographies by a mix of established players and new entrants, each targeting different part of the LEO value chain from broadband to direct-to-cell to orbital data centers ambitions. Now let's try to translate this expansion into numbers. Over the next five years, the scale of the system will change dramatically. Downlink capacity deployed in space is expected to grow by roughly 10x by 2030, reflecting the impact of the latest generation of launchers and the rapid expansion of constellation.
Interestingly, the capacity deployed in space by 2028 may represent a similar order of magnitude than the total international internet bandwidth on Earth. Who would have guessed that 10 years ago? At the same time, the backhaul infrastructure will also expand significantly with the numbers of gateways increasing by 1.6x. This infrastructure build-out will enable a steep rise in usages. We estimate that the numbers of new subscriber could exceed 200 million by 2030 from about 10 million today, driven by the proliferation and the improved quality of services as well as the arrival of new entrants from all geographies. LEO is no longer just a niche connectivity technology, it is becoming a large scale communications and eventually compute platform. It is difficult for us to go through a LEO presentation without talking about SpaceX.
ST and SpaceX, it's a decade-long partnership built on co-development across key technologies for satellite and user terminals. The collaboration has produced billions of co-design products using millions of Starlink user terminals and over 10,000 Starlink satellites. ST products have been critical in helping SpaceX scale production through co-designing key chips, engineering services, and high volume manufacturing, ST has demonstrated the exceptional value of its innovation and manufacturing capabilities. This collaboration has relied on differentiated ST technology and on the use of multiple ST products across the Starlink constellation. I will come back later to the specific technology and products building blocks behind this success. For now, the key message is simple. The collaboration continues with a focus on ramping up ongoing designs, excuse me, and architecting together the next generation satellites and user terminal.
This partnership has yielded impressive numbers, as you can see on that chart. This chart illustrate the scale Starlink and ST have reached together. To date, ST has delivered more than 7.5 billion, this is 7.5 followed by nine zero ICs, and the trajectory continues to accelerate as deployment expands. I know it is difficult to visualize what that really means, so let me give you a more tangible image. This close to 20,000 sq m of active silicon chip delivered, both in BiCMOS and FDSOI, can cover up to four American football fields. If you are a basketball fan, 48 basketball courts. This is a strong example of ST's ability to support high volume space-grade program at industrial scale. It also shows how ST sits at the heart of Starlink growth and execution.
I touched base on this earlier when I spoke about capacity. Space capacity is a key to LEO service expansion, especially LEO broadband service expansion. As we discussed earlier, capacity has increased significantly over time from the first generation of Starlink satellite to the latest V3 architecture. Across successive generation, downlink capacity per satellite has increased from tens of gigabit per second to terabit per second levels, roughly a 40x improvement. This step up in performance reflects the evolution of the satellite platform itself. It's more integrated, it's more capable, and it's designed to support much higher throughput. In other words, each new generation of satellite has not only improved technical performance, but it has essentially expanded the economic potential of the network.
Parallel to this evolution, the ST bill of material was multiplied by 8x between the V1.5 and the V3 satellite, now reaching several tens of thousands of EUR per satellite. That is important because it shows how ST is not only present, but increasingly embedded in the value creation of the platform. As importantly, let me now turn to the ground LEO infrastructure, and specifically the user terminals. Here, we have witnessed a very visible evolution in antenna design. Over time, user terminals have become smaller, more integrated, and more affordable, all of which were critical to making this market scalable. With our differentiated and mass-produced technology, ST has supported Starlink value creation through bill of material cost optimization and product innovation.
We have now reached down to only several tens of USD per user terminal, which make the user terminal much closer to a consumer-like device. Making LEO broadband services bound to explosion. In practice, it has helped transform satellite broadband from an expensive and niche offering into a mass-market product, now addressing more than 155 countries and markets. Lowering the terminal cost has been a key accelerant of LEO broadband service adoption, which I will now attempt to scope for you. Based on our current view, ST SAM for LEO broadband electronics was around $650 million in 2025, growing to roughly $2 billion in 2028, and reaching close to $3 billion by 2030. This reflects a rapid market growth, importantly, this still exclude additional upside from the orbital data center application.
As mentioned earlier, the market is becoming global, with new constellation from new geography emerging. While Starlink still represent the lion's share of the business today, it is not the only opportunity. On top of Project Kuiper, now rebranded Amazon Leo, and European projects, I would also mention two Chinese projects which are today at early stages, but with strong growth ambition. The first one is China Satellite Network, also called StarNet, was planned 13,000 LEO satellites by 2035, with 170 satellites in orbit so far. The second Chinese project is SpaceCell Satellite, also called G60, which has planned 15,000 LEO satellites by the early 2030s, with 130 satellites in orbit so far.
I also want to point to the recently announced Blue Origin TeraWave project for a space-based network optimized for enterprise data centers and government customers. When it comes to ST, we have already been qualified at another major player, and we continue to build momentum with new constellation at the deploy. Of course, a market growing at a 35% CAGR naturally creates appetite, and new supplier will try to gain share, which we have factored in our numbers. Our outlook remains very positive. The market is expanding fast, our customers base is broadening, and ST, as you will see soon, has the technology, the products and the manufacturing infrastructure to capture that growth. Talking about products, you can see on this chart how comprehensive is our product offering.
To keep it simple, we are present across the three layer of the ecosystem, be it satellites, gateways, and user terminals. Our portfolio spans RF and digital ASICs, radiation-capable MCUs, and a wide range of products in power, analog, MEMS, secure element, filters, and more. This depth and breadth give ST a unique positioning in LEO. It means we can address a very wide set of application needs across the value chain, while also tailoring our offer to the specific performance and cost requirements of each layer. Let's put some number around this now so that you can get a sense of the dollar amount of electronics ST can serve into this market. We provide up to several tens of thousands of dollars bill of material per satellite, a few hundreds of dollars per gateway, and several tens of dollars per user terminal.
To appreciate the order of magnitude, let me remind you what we discussed earlier. Thousands of satellites are produced every year, thousands of gateways are being deployed, and millions, becoming tens of millions, of user terminals are being shipped every year. As such, that does represent a very meaningful business opportunity for ST. To understand why we are so well positioned in LEO, we need to look back at the technologies behind the offering. The first pillar is FDSOI. This is a key enabler for ASIC and microcontrollers. It combines high performance, energy efficiency, and structural immunity to radiation, while also providing robust embedded memory. We are able to supply this unique technology from our 300 millimeter fab in France, and also with our foundry partner.
The second larger pillar is a winning combination of the front-end and back-end technology we offer for the user's terminal front-end module. It's based for the front-end side on ST BiCMOS process, which is the right technology for flat Phased Array Antennas, especially for Low Noise Amplifiers and Power Amplifiers. It delivers strong RF performance in key satellite communication bands with very low noise figures, enabling to scale up the numbers of users served simultaneously. With high linearity, reducing the numbers of antenna elements itself, allowing user terminal cost reduction, hence service democratization. With the right balance of performance and cost. This technology is served from both our 200 and 300 millimeter fab in France. Another key enabler is on the back-end, our panel level packaging, also called PLP. In LEO, the scale requirement is massive.
Packaging at scale, meaning several million units produced per day becomes a real differentiator. PLP enables high volume production, strong RF and thermal performance, and miniaturization. PLP is truly an ST first. On top of the technology themself, ST manufacturing independence also provide the market with a unique kind of geopolitical stability, if you wish, through a highly resilient supply chain setup. It's one thing for us to self-claim, and it's even better to back it up with customers' testimonies. You can see here some quotes from Starlink executive recognizing the value of previously described technology. FDSOI, including the recently introduced 18 nm node for high-performance microcontrollers used in Starlink Mini laser system for intersatellite optical links. BiCMOS, the backbone of Leo user terminal front-end module, and on the back end, the PLP panel level packaging technology I was describing 1 minute ago.
In Starlink, ST is more than a supplier. We are a key technology enabler across the platform, helping Starlink improve performance, cost, and scalability. Bringing together our proven technology of scale-up execution and the rapid expansion of the LEO opportunity, ST has a very clear ambition. We aim to generate well above EUR 3 billion in cumulative revenue in the space market over the next three years, from 2026 to 2028, combining LEO and traditional space. On the LEO side, these numbers include only the broadband and direct-to-cell opportunities. Additional opportunities will continue to emerge, including LEO data centers, which are not included in this ambition. It could further expand the market over time. We do consider the outlook for ST as quite promising. We have demonstrated strong execution track records, excuse me. We have market leadership, we see additional growth vectors ahead.
Overall, we are, and we intend to remain the leading semiconductor provider in the new space. To wrap things up, let's agree that a major disruption is happening in space, and LEO growth is fast accelerating. There are four things that I would like you to take away. First, ST manufacturing independence and our unique technology and manufacturing capabilities have put us at the heart of the LEO ecosystem. Like I said at the beginning of this presentation, a 10-year overnight success. Second, we have a differentiated portfolio spanning every layers of LEO. Third, the LEO sum is expected to reach around EUR 3 billion by 2030, roughly 4x versus 2025. While ST is targeting well above EUR 3 billion of cumulative space revenue from 2026 to 2028. Last, the opportunity is still expanding.
Orbital data centers will be a further growth driver, even though they are not yet embedded in our revenue ambition. In short, we expect space to be major growth drivers for ST in the coming years. I hope you found this presentation interesting. Thank you for listening, and we are now ready to answer any questions.
Our first question comes from Stephane Houri from ODDO BHF . Please go ahead.
Yes. Good afternoon, everyone. Actually, I have one question and a follow-up. The question is, I'm trying to reconcile all the numbers that you have given, you know, the sum of EUR 3 billion by 2030 and also the EUR 3 billion-plus space cumulative revenue by 2028. At the same time, you seem to say that you will reach EUR 1 billion already this year. What kind of trajectory, revenue trajectory can we expect from 2026 to 2028, if you can simplify it for me. Thank you.
The follow-up would be also to have a view on what kind of market shares, do you think you will have by 2028 or 2030, if you prefer. Thank you.
Thank you, Stéphane, for the questions. I will clarify the numbers indeed. Over the next three years, 2026, 2027, 2028, our ambition is to deliver cumulative revenues of well above EUR 3 billion for space as a whole. You're right, we have indicated in 2026 that we may already be close to EUR 1 billion. The growth rate beyond 2026 will essentially depend on many factors, and I will get back on that in a minute, Stéphane. As we said, well above EUR 3 billion, I guess that leaves scope for growth and opportunity. We factored in, you know, assumption some market share loss for main customer.
We do not believe that actually our current market share that is exceeding 90% is something that we can keep as is. The numbers that we are painting right now do not include any potential upside coming from data center in space in the medium term. Ultimately, I have to say that actually our number, our growth rate beyond 2026 and the close to EUR 1 billion that I've just mentioned are going to be dependent on the pace of rollout of existing and new constellation. If you need to go atomic as to what is going to be the first level critical path to that, then I would say that actually rocket launcher is at the top of the list.
Clearly we are keeping a close eye and a steady eye on the success of Starship and New Glenn, respectively of SpaceX and Blue Origin. Those are actually real game changer, especially Starship. That would be, you know, the largest rocket ever built, able to carry roughly 5x to 7x more than what you can do with Falcon nine, at 150 tons. That will make a huge difference in term of capacity deployment in sky. Okay. Thank you, Stéphane. Next question, please.
The next question comes from Sandeep Deshpande from JP Morgan. Please go ahead.
Yeah. Hi. Thanks for letting me on. My question is you on one of the slide you showed.
Sandeep.
Can you talk?
We cannot hear you.
Can you-
Your connection is not good.
Hi. Can you hear me better now?
Try, try. Continue, continue. Let's see.
Yeah. Hi. In terms of what chips you're supplying in this market, what is the majority? Is there one kind of chip? Is it the RF chips which are the majority of your revenue, or is it the MP in terms of the satellite market? In terms of where growth is coming, is it coming from those chips or is it coming from newer chips that you are supplying into this market? A follow-up to that would be where is the comp appearing for you at this point? Thank you.
Could you restate the last one, Sandeep?
The last question was where are you seeing co-competitor threats at this point in this market?
Okay. Got it. The class of products that we ship into space differ between satellite and user terminal. Clearly, we are not going to give any breakdown but inter user terminal are the largest contributors to the revenue when it comes to what we do. When it comes to the user terminal, they are being essentially dimensioned by what we call front-end module. What is a front-end module? It's actually something that does four things. Signal amplification, transmit and receive, hence what I've mentioned earlier in term of Power Amplifier and Low Noise Amplifier. Switching because you need to go and move from talking to listening.
Filtering to remove electronic noise, and also the phase shifting that is happening, when you're creating actually the beam for beamforming. They are actually the dimensioning element in the cost of the user terminal and the best technology on the planet to go and build front-end modules end up being BiCMOS. As such, I would say anybody that want to compete against STMicroelectronics on BiCMOS will be fair game as a potential competitors. Our BiCMOS platform, I have to say, is super established, in the context of both either its cost optimized, patterns for Ku band or in the context of its performance for Ka band. The, the different bands of the LEO market.
We clearly, this market, like I said, will attract competition, but we feel quite strong as well about the front-end and process technology differentiation we have, in the context of our BiCMOS platform.
Thank you.
Okay. I missed the middle question, Sandeep, but, you know, we'll have to go and, I'm not sure I capture that one, but, yeah, the connection was not great. Forgive me.
The next question comes from Gianmarco Bonacina from Banca Akros. Please go ahead.
Yes, good afternoon. Couple of questions from me. The first one is about the China opportunity. I think you mentioned a couple of Chinese companies that want to be active in terms of the satellite market. Do you think that you can become a vendor given the current geopolitical situation? Are you already, let's say, working with them, and do you think this is a viable, say, opportunity for you? The second one just about the market share. If I understood correctly, you will grow from the around EUR 1 billion to clearly above EUR 1 billion. The market share in 2028 will be well above 50%. How about competition?
What kind of level you think you can keep going forward, maybe looking at 2030? Is competition very intense, or you think that you can keep this, let's say above normal market share in this market? Thank you.
No. Okay, Gianmarco. Got the two question. Okay. Look, I'll start with the China question. We are unapologetically European. We end up being actually U.S. and China compatible. The China compatibility though, start and finish at user terminal. Because of export control, we cannot be any satellite technology happening in China. We are focusing our entire energy on user terminal. The entire logic of what I've explained in term of user terminal and how they are being dimensioned and where the performance of a network comes from, relating back to BiCMOS, this exact same principle applies to also to Chinese user terminals, regardless if they are actually doing analog or digital beamforming.
We have not yet disclosed anything specifically happening in China, but we are actually quite engaged in user terminal development happening there, and it's a market for us that we are looking into, even though, like I've explained, we are in the very, very early innings because their satellite footprint remains quite small if I can put it at this stage. Okay. That's the first question.
In term of market share, and looking at that for the coming five years till 2030, for sure, you know, we expect to grow and sustain a pretty oversized market share, clearly lower than the 90% that we are talking about right now, but still quite high in the context of what we're doing with Starlink, also in the context of our positioning, especially when it comes to front-end modules, in other constellation. There will be competition for sure. The competition, like I said, I'll let you make your work on finding names of competition.
The pedigree of a competitor needs to be a company that is likely an IDM, that is actually likely doing a BiCMOS, has huge assembly capabilities, and is able to master PLP. If you find this class of company, they are likely to become the competitors of ours.
Thank you.
Thank you, Gianmarco. Next question, please.
The next question comes from Didier Scemama from Bank of America. Please go ahead.
Yes, thank you for taking my question. Just wanted to come back to the question that Sandeep asked. Just wanted to understand if you could give us a high-level breakdown of revenues, 2025 and whatever you think it could be in 2028 between user terminals, gateways, and the satellite itself. Just high level so that we've got an idea on how to model this business, and I really appreciate for all the details you've given. The second part and the follow-up would be, I think from your slide you mentioned that there was 9 million subscribers to, you know, satellite communications, but there's been about 20 million user terminal chips being sold, and I think expectations for 30 million from your slides. Can you explain the difference?
Are those chips also going into the gateways or any other market that would explain the delta between these 2 numbers? Thank you.
Yep. Thanks for your question, Didier. The first question, I will not disclose precise numbers. Directionally, I will repeat what I just said earlier. UT user terminal are the largest contributors to revenue, followed by satellites, while gateways are of less materiality when it comes to our revenue at this stage. To date, what you need to understand in term of numbers of chips sold compare, in contrast to numbers of subscribers, I think this was your question, Didier. It's actually a good question, which is a function of the amount of antenna elements in a user terminal.
That amount of antenna elements which are what I talked about, those front-end modules that actually manage an antenna elements to do what I said it was doing in term of TX/RX and beamforming. That actually varies greatly and has been varying, has been moving greatly between different classes of terminals. It's actually you need to think of user terminals not as something that is software defined. The capacity, the bandwidth you will get at home is a function of the capacity of your terminal, the numbers of antenna elements it has. That number to make it short, that numbers can vary anywhere between, I would say, the hundreds to more than 1,000.
Based on the mix of user terminal and so on and so forth, this is where, you know, the close to 10 million subs ended up actually leading to more than 7.5 billion ICs. You can make the math backward a little bit like this.
Okay. Okay, there are basically multiple antennas per user terminals.
Mm-hmm. Totally.
Thank you.
Anywhere from 100, more than 100 to more than 1,000.
All right. Brilliant. Thank you very much.
My pleasure. Thank you, Didier. Next question, please.
The next question comes from Joshua Buchalter from TD Cowen. Please go ahead.
Hey, guys. Thanks for taking my question and hosting the call. Two from me. One, and I'm sorry for continuing to ask about the share narrative. It's just we don't get many verticals where companies have 90% share very often. You know, as we think about the share moving lower over the next several years, how much of that is just naturally from SpaceX having less overall dominant position in the market share as others ramp versus tool sourcing on sockets you're currently engaged in, including at SpaceX. For my follow-up, you made a comment before that you think competitors will primarily be IDMs. Can you walk through the logic here? I mean, there are third-party foundries that offer FDSOI and BiCMOS, for instance.
Is it because you anticipate these large satellite customers needing some element of customization, or something else that's driving that, the logic about it needing to be from IDMs? Thank you.
Joshua, thanks. Those are two great questions. I'll start with the share question. I will not answer it directly, but if I look at the, you know, the total sum over the next five years, it's actually from a lion's share standpoint I mentioned by SpaceX. As such, I would say that actually our numbers are more actually influenced by our market share in SpaceX than they are influenced by the success of an Amazon Leo or OneWeb or a Chinese constellation. That's the first answer to your question. That's the answer to your first question, forgive me. The second question as to why an IDM.
I think it's a great question for, and there is two reasons to that, but one is more important than the other. The first is what you've mentioned. Often for those front-end modules, those are not actually ASSPs. They end up actually custom products. Think of an ASIC that has to be developed. Often, you know, you need to have design resources to go and do that, which makes a pure play foundry a bit more complex. I tell you actually, it is a second order issue. The first order issue is actually, especially when you build those front-end modules, the back end end up being as important as the front end.
I will not share the exact details in term of cost contribution for a front-end module, but the competitiveness you have to build actually the back end is critical. If you allow me, I will take a little detour on this because it's important for you to understand something. We have developed this technology called panel level packaging. Unlike traditional packaging where you're using circular silicon wafers, actually, PLP use large rectangular form factor panels, if you wish, hence panel level packaging word, that are quite large, you know, hundreds by hundreds of millimeters.
We have also developed a specific direct copper interconnect, which allows actually to eliminate electrical resistance and inductance in making it actually super efficient from a power efficiency and thermal management. This PLP technology alone, without the BiCMOS, will not be as compelling. The reverse is also true. The BiCMOS without the PLP technology will not be as compelling. That's the reason why, Joshua, I was saying, look, you know, when you stack up all those margins and you look at the technology end to end, I do believe that, you know, it's a bit complex to not be an IDM in that market. I hope it answers your question.
Thank you. May the force be with you.
Thanks. Thank you. Thank, thanks, Josh. Next question, please.
The next question comes from Jakob Bluestone from BNP Paribas. Please go ahead.
Thanks for taking the question, for hosting the call. You kindly gave a bit of color around the content per unit for satellites being in the tens of thousands, for gateways being in the hundreds of dollars, and for user terminals being in the tens of dollars. I was just wondering, can you maybe give us your thoughts on how do you see those numbers evolving? Do you think they'll go up or down over time? Any thoughts you can share with us on pricing trends, given it sounds like maybe a little bit of pressure on market share.
Another great question. Look, here is my two cents. I do believe the content per satellite this orbital data center that will obviously completely change the dynamics economically. In and of itself, you know, they are going to become more and more sophisticated. For that, I'd like to give you an illustration. This is public information that I'm sharing, so I'm allowed to go and share it with you. If you look now at the latest generation of satellite of SpaceX, the downlink capability is 1 terabit per second, and the uplink capability is 160 gigabit per second. This is gigantic in and of itself.
I do believe that this class of downlink, uplink capabilities will continue to increase, will become faster and faster and faster. I do believe that silicon content will continue to increase. On the user terminal, I have a double answer. Sorry for making your life a bit harder, but I want to share things factually. When you look at Ku band user terminal, I think that actually we're going to soon reach a plateau. I will not share the numbers. Tens of EUR, a few tens of EUR, shall I say.
We're going to at some point in time start to reach a plateau because you need to be at the intersection of quality of service, and you're reaching physics limits at some point in time. I see that actually reaching a plateau when it comes to Ka, and Ka is actually, you know, will become very important over time. It's actually the technology that is actually sitting behind Amazon Leo constellation, and will become also technology for more. I think Ka, though, will bring with the different dynamics because Ka is a more complex technology to support because the frequency band is much higher. The value of Ka is obviously it's a very large bandwidth compared to Ku.
You are actually, you gain in density, but you gain in complexity as well. Complexity may go in our favor. I would say to summarize on user terminal, we are going to a soft landing in term of the economics, and Ka will provide actually a bit of a height booster just because of the nature of the band at stake.
Thanks. That's very helpful.
Next question, please.
The next question comes from Domenico Ghilotti from Equita. Please go ahead.
Good afternoon. First question is on the product life cycle on the user terminal. If you see at some point the need for replacement of the existing install base and what is your view on the product life cycle? The second question is on the how broad is the client base over the medium term in your projection? I mean apart from the leading client and then probably a second, a second relevant client, do you see quite a sizable contribution from others or still very concentrated client base in 2027, 2028?
Product life cycles, I would say, for user terminal, ale, roughly 18 month in terms of, you know, a generation. I'm very happy to share that number with you because I've shared some of the economics, and as such, you can now understand why only people with manufacturing excellence are able to go and handle this type of life cycle because you're doing vertical ramp up and vertical ramp down. Obviously we have engaged customer program that have taught us how to do that at full yield and full quality. There is no coincidence eventually as to why we are where we are. How broad the customer base will be?
Okay, look, in the next five years, I don't see more than 10 players. That is as broad as it gets because you understand the dynamics, right? For you to be relevant, it's completely dimensioned by launches and satellites. There is only so many companies and so much money able to do that. I think in term of scale that will impact STMicroelectronics economics, I don't see more than 10 players. Even that, I have stretched the number a little bit.
Thanks.
Thanks, Domenico. We have time for one more question.
We take the follow-up question of Didier Scemama from Bank of America. Please go ahead.
Yeah. It's not directly related to Leo satellite, but I wondered, is that number that you've given that just about EUR 1 billion for this year, does that include also military applications? I would imagine STMicroelectronics is also supplying into, you know, the Rafale and some other military equipment, or is that included in there and is that substantial? I've got a quick follow-up. Thank you.
Not really. It's not, and the answer, in general outside of this would be it's completely marginal.
Okay. Got it. Since it's May the fourth, I wondered what would be your silicon content to the Death Star?
That is a great question which would require you to become a Jedi for me to share the answer.
Thank you so much for the thing on Leo. It's really useful. Thank you.
Thank you.
Thank you. Thank you. I think this is ending our call for this presentation. Thank you everyone for joining us. If you have further question, feel free to reach out the IR team, and I wish you a happy day. Thank you.
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