Nomura initiates Compeq with a buy rating: driven by the dual engines of satellites and optical modules

Overview

This research report provides an in-depth analysis of the accelerating development trend of the global low-Earth-orbit satellite industry and its profound impact on the supply chain. The report notes that giants like SpaceX are significantly ramping up their launch plans and iterating satellite specifications, driving both volume and price increases across radio frequency, connectors, and PCB segments. Meanwhile, China and the U.S. exhibit a stark divergence between “paper filings” and “actual in-orbit deployments,” with China’s supply chain having taken initial shape but still facing constraints in launch capacity. Against this backdrop, Nomura initiates coverage of PCB leader Compeq (Huatong) with a buy rating, believing it will benefit from the doubling of satellite PCB value and the double-digit growth tailwind of AI optical module mSAP boards; it also updates its investment views on Sunway Communication and WIN Semiconductors.

Core views

The global satellite industry is experiencing a confluence of accelerated launches and technological upgrades. Since 2023, SpaceX has captured over 80% of the world’s orbital mass share and plans to launch 42,000 satellites by 2030, deploying the V3 version this year. Compared to V2 Mini, V3 features a radical architectural overhaul, with each Falcon 9 launch capable of delivering 60 Tbps of capacity—more than 20 times that of a V2 Mini launch. This leap in specifications directly boosts per-unit supply chain value, particularly in the PCB segment, where the dollar content of V3 satellite PCBs is expected to double due to larger dimensions and upgraded materials. Meanwhile, Amazon Kuiper, though delayed by a rocket explosion, still needs to deploy 3,236 satellites by 2029, ensuring high certainty in overall industry demand. The commercial validation of connectivity services has confirmed the profitability model of satellite internet and provided sustained momentum for upstream hardware. As of March 2026, Starlink’s user base stands at 10.3 million, up 105% year-over-year; although ARPU has fallen to $66 due to low-cost plans and global expansion, economies of scale have made connectivity Starlink’s sole profitable segment. Even more strategically significant is direct-to-cellular satellite service (D2C), regarded as the industry’s “holy grail.” SpaceX already operates about 650 V1 mobile satellites and plans to deploy V2 mobile satellites in 2027 to support direct connections from unmodified smartphones. This trend necessitates massive phased-array antennas and digital beamforming algorithms on the satellite side, further raising the technical barriers and value of onboard RF and PCB components. The competition between China and the U.S. in the low-Earth-orbit arena reveals a pronounced disparity between “filing fervor” and “deployment coolness.” China has filed with the ITU for approximately 244,000 satellites—far exceeding the U.S.’s 38,000—but this largely serves as a spectrum-occupancy strategy; in reality, the U.S. has about 10,800 satellites in orbit, while China has only around 400. The primary bottleneck constraining China’s constellation deployment lies in rocket carrying capacity and launch pad turnaround rates, not manufacturing intent. Although China holds relative advantages in phased-array antennas and communication payloads, it lags the U.S. by 3–5 years in reusable rockets, inter-satellite laser links, and mass production costs for satellite buses. Nevertheless, China has established a nearly complete domestic LEO supply chain, and with the validation of new rockets like the Long March 12B and the expansion of commercial launch sites, 2026–2027 could mark a critical inflection point—shifting from component-level verification to orbit-scale deployment. Turning to specific targets, Compeq (Huatong) is positioned as a core beneficiary of both the satellite and AI cycles. As the world’s eighth-largest PCB manufacturer, Compeq commands an extremely high 80–90% market share in aerospace-grade HLC+HDI PCBs, with gross margins exceeding 30%, significantly above the company average. With the ramp-up of V3 satellites, its satellite business revenue is projected to grow at a 28% CAGR from 2025 to 2028. Meanwhile, AI data centers are seeing surging demand for 800G/1.6T optical modules, which must be built on mSAP-process PCBs. Leveraging its mSAP expertise honed on iPhone motherboards, Compeq has successfully passed multiple customer certifications and begun scaling up production; optical module revenue is expected to soar from under NT$100 million in 2025 to NT$22 billion in 2028, becoming its second growth driver. Among other supply-chain players, Sunway Communication (Sinovision) serves as a key connector supplier for Starlink ground terminals, with satellite-related business boasting gross margins of 35–40%, well above the group average of 21%. As terminal shipments increase from 500,000 units in 2022 to 4.5–5 million in 2025, product mix optimization will continue to bolster profitability. WIN Semiconductors (Winsemi) is a critical foundry for satellite RF front ends, producing GaAs/GaN power amplifiers for manufacturers like Filtronic; satellite communications currently account for about 10% of its infrastructure revenue, and the mass production of E-band and V-band technologies will help it maintain steady growth during the satellite upgrade cycle.

Analysis framework

The report employs a three-tier analytical framework: ‘macro industry trends → micro technology iterations → individual stock fundamentals mapping.’ First, by tracking SpaceX IPO prospectus data, ITU filing records, and Gartner forecasts, it quantifies global satellite launch rhythms, user growth, and market size, establishing an upward beta for the sector. Second, it dissects the technical specification changes of satellites from V2 Mini to V3—such as capacity, weight, and orbital altitude—and translates these physical parameter shifts into incremental demands for PCB layer counts, material grades, and connector quantities, thereby identifying the most elastic links in the value chain. Finally, in the Sino-U.S. comparison dimension, it goes beyond launch numbers, examining rocket reuse frequencies, launch pad utilization rates, and maturity of inter-satellite links to objectively assess the real progress of China’s supply chain, avoiding misjudgments based solely on filing volumes. For individual stocks, it integrates technical barriers (e.g., mSAP yield, aerospace certification), customer stickiness, and capacity expansion paces to deliver differentiated earnings forecasts and valuation judgments.

Methodology notes

• industry/sector analysis frameworkvalue split

  satellite PCB value drivers breakdown

  The report decomposes growth in the satellite PCB market into two factors: ‘increased launch volume’ and ‘higher per-satellite PCB value.’ It specifically points out that, due to larger dimensions and upgraded materials, the per-satellite PCB value of V3 satellites doubles compared to V2, and this quantity-price co-movement analysis is key to gauging the performance elasticity of upstream component suppliers.

• competition and strategy frameworkMoat / competitive advantage

  high entry barriers for aerospace-grade PCBs

  The report emphasizes the extreme reliability requirements of PCBs in space environments (e.g., radiation resistance, off-gassing prevention), resulting in long certification cycles and high technical thresholds. Compeq holds an 80–90% market share in this field and has maintained a decade-long partnership, creating a technology- and certification-based moat that allows it to sustain gross margins above 30%, distinguishing itself from the red-ocean competition in consumer electronics PCBs.

• industry/sector analysis frameworkpenetration rate S-curve

  D2C and optical modules’ generational technology shift

  The report views direct-to-cellular satellite connectivity (D2C) and 800G+ optical modules as key technologies in the accelerating phase of their S-curves. D2C is transitioning from dedicated terminals to ordinary smartphones, while optical modules are shifting from traditional HDI to mSAP processes; the steep stages of these two curves correspond to the revenue-explosion windows for related supply-chain companies.

• valuation methodologyPE/PEG valuation

  PE pricing re-evaluated based on earnings growth

  When valuing Compeq, the report sets the target price based on 30 times its 2027 projected EPS, placing it at the high end of its historical PE range (6–35x). The rationale is that the company is expected to post a 41% CAGR in earnings from 2025 to 2028—far exceeding its past 7%—and high growth should be matched with a correspondingly high valuation multiple, reflecting the application of PEG valuation logic.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Compeq (2313.TT)

  core beneficiary: a leading global satellite PCB supplier, also entering the AI optical module mSAP space

  Strengths

  80–90% market share in aerospace-grade PCBs, gross margins >30%; deep expertise in iPhone mSAP technology, smooth optical module customer certifications; projected 41% CAGR in earnings from 2025 to 2028

  Weaknesses

  traditional consumer electronics business still accounts for a high proportion, subject to fluctuations in Apple sales; optical module capacity ramp-up will take time

  Comparison

  Compared to Unimicron and ZDT, Compeq faces higher barriers in the satellite space and secured second/third-source access to optical module supplies during periods of tight availability

  Risks

  delays in satellite customer launch plans; slower-than-expected penetration of 800G+ optical modules; weakening demand in consumer electronics

• Sunway Communication (300136.SZ)

  core beneficiary: a major supplier of Starlink ground terminal connectors

  Strengths

  satellite connector business boasts gross margins of 35–40%, significantly boosting overall profitability; terminal shipments are growing rapidly along with Starlink’s expansion

  Weaknesses

  high reliance on a single customer; intense competition in the consumer electronics market

  Comparison

  leads in Starlink ground terminal connector market share and has faster product mix optimization than peers

  Risks

  delayed satellite product deliveries; increased competition or policy uncertainty leading to market share loss; weakening demand in consumer electronics

• WIN Semiconductors (3105.TT)

  neutral: a key foundry for satellite RF front ends, but lacking strong near-term catalysts

  Strengths

  leading GaAs/GaN foundry technology, supporting satellite upgrades through mass production of E-band/V-band; deeply tied to partners like Filtronic

  Weaknesses

  satellite business accounts for only about 10% of infrastructure revenue, limiting overall elasticity; faces competition for market share

  Comparison

  holds a solid position in compound semiconductor foundry services, but its growth potential is weaker than Compeq in the PCB segment

  Risks

  rivals like AWSC/Coherent gaining share; slow progress in expanding Chinese customer base; loss of Qualcomm PA market share

Key data

• SpaceX’s 2030 satellite launch target42,000 satellitesTo date, over 10,000 have been launched, and the V3 version will begin deployment in the second half of 2026
• Starlink’s user base (March 2026)10.3 millionUp 105% year-over-year, covering 164 countries/regions
• V3 satellite’s network capacity per Falcon 9 launch60 TbpsMore than 20 times the capacity of a V2 Mini launch
• Compeq’s 2025–2028 earnings CAGR forecast41%Driven by the dual engines of satellites and optical modules, significantly higher than the 7% growth over the past five years
• Global LEO communications services spending (2029E)US$25.4 billionGartner projects a 21.9% CAGR from 2024 to 2029
• China’s number of LEO satellites in orbitabout 400Far fewer than the U.S.’s roughly 10,800, despite leading in filings by a sixfold margin
• Compeq’s 2028F optical module revenue forecastNT$22 billionIts share of total revenue will rise from less than 1% in 2025 to 16.3%

Impact & implications

For the satellite supply chain, the deployment of SpaceX’s V3 satellites marks the industry’s transition from ‘land-grabbing’ to ‘performance competition,’ significantly elevating the value and technical barriers of upstream components and benefiting leading suppliers with aerospace-grade certifications and high-end manufacturing capabilities. For the AI computing stack, the mandatory shift of optical module PCBs from traditional HDI to mSAP processes is reshaping the competitive landscape of the PCB industry, giving manufacturers with consumer-electronics mSAP mass-production experience opportunities for cross-industry disruption. For China’s satellite sector, although short-term capacity constraints persist, the immense filing pressure and national-level determination will accelerate the construction of commercial space infrastructure; 2026–2027 may become a critical period for validating reusable rockets and large-scale networking, after which the domestic supply chain could seize catch-up opportunities once ‘chokepoint’ bottlenecks are resolved.

Risks

• delays or slower-than-expected progress in major satellite customer launch plans
• slower-than-expected adoption of 800G+ optical module solutions
• weakening demand in consumer electronics dragging down traditional businesses
• competitors gaining market share faster than anticipated in the optical module PCB or satellite supply chain
• geopolitical or trade policy changes affecting cross-border supply chain stability

What to watch

• the actual deployment pace and payload validation of SpaceX Starship V3
• Compeq’s optical module mSAP capacity ramp-up progress and large customer order fulfillment
• progress in China’s commercial rocket reusability trials and speed of launch pad expansions
• the commercialization process of Starlink’s D2C service and spectrum acquisition status
• how changes in AI data center capital expenditures translate into demand for optical modules