What is inside a satellite and how is satellite manufacturing changing?

When the first satellite entered orbit in 1957, the veil of space lifted, if ever so slightly. The collective minds of Earth's innovators raced as the perceived threshold for our technical capabilities blew wide open.

Communication and knowledge transfer at the speed of light.

Accuracy of GPS and observations down to the meter. Access not only for the few, but for all. Slowly, but surely, it changed the way we lived, the pace accelerating continuously as the years rocketed past.

One day, the lens of focus will flip from Earth to space. We know not what will reflect back.

But, it's not prudent to ponder the distant future for too long. It is the steps we take today that make this possible. Our near future holds enormous opportunities as well. Satellites that make connection with the world of the internet instantaneous anywhere on the planet no matter how inhospitable or remote. We have access to up to date comprehensive data that could hold the key to winning our race against climate change.

This is the business that makes space technology possible. Its capabilities have already proven itself to be profitable. In many ways, without it, the world of the internet could not exist. Because of satellites, we are free to dream of infinite possibilities, the stars twinkling in our eyes.

Artificial satellites have been launched into space since Sputnik 1 in October 1957, for a wide variety of applications. On 1 May 2023 the Union of Concerned Scientists counted 7,560 operating satellites. About 90% were in low Earth orbit, which reaches up to about 2,000 km, 2% in medium Earth orbit, between about 2,000 and 35,500 km, and 8% in geostationary orbit, 35,786 km up (NASA Earthdata). The number has more than doubled since. On 30 September 2026, Jonathan McDowell's count was 16,913 active satellites, 11,143 of them SpaceX's Starlinks.

The largest applications are communications and Earth observation, which includes imaging, weather and geospatial intelligence. GPS is part of a third, smaller group, navigation. In this article we will discuss the basic vehicle architecture of a satellite, current trends in the satellite industry, and a case study.

What makes up a satellite?

A full spacecraft vehicle stack can be broken down into three main components: the satellite bus, power systems (solar wings), and the payload module. Bus-derived vehicles are typically bespoke, unique to each customer requirement and the mission at hand. Startups such as Apex are changing that by building standard buses on a production line. Apex's first, Aries SN1, launched in March 2024. Below is a breakdown of each major sub-system found on a vehicle.

• Command and Data Handling: carries and stores data between units and ground control
• Communications System: includes a receiver and transmitter for communication with ground stations, as well as links between satellites (radio, antennas and so on)
• Electrical Power System: solar panels generate most of the power, and batteries take over when the panels are in shadow
• Propulsion: used for orbital adjustments and manoeuvres, typically chemical propulsion but sometimes electric
• Thermal Control: keeps the satellite within the temperature range it needs to keep working
• Attitude Control System: keeps the satellite pointed the right way, using sun sensors or star trackers to measure its orientation and reaction wheels to change it
• Guidance, Navigation, and Control System: works out where the spacecraft is and where it needs to be, and adjusts its path to meet mission requirements

What are the current trends in the satellite manufacturing industry?

Satellite size

Satellites are often grouped by mass. NASA uses five classes for small spacecraft, all under 180 kg:

Source: NASA, State of the Art of Small Spacecraft Technology. Above 180 kg there is no standard scheme, and sources draw the lines in different places. Viasat, for example, calls 100 to 500 kg "mini", 500 to 1,000 kg "medium" and anything over 1,000 kg "large".

In the past decade, a recent trend has been a reduction in satellite mass but higher number of satellites, forming a "constellation" in orbit that works together to achieve the mission requirements. Small Sats require smaller rockets, can be built faster, and may have operational advantages (low-latency sats in LEO). This could be considered as the "r-selection" of the satellite industry (high-volume).

However, some evidence points towards a trend in the opposite direction: steady growth in satellite mass, within constellations. SpaceX's first Starlinks weighed about 260 kg. The V2 Mini satellites it began launching in 2023 weigh about 800 kg. This trend is driven by increased demand for higher throughput, better performance, and more power, all unlocked by greater launch capabilities and cheaper launch cost (think: Starship, which reached orbit for the first time on 28 September 2026 and released 26 Starlink V3 satellites). It is possible for both trends to occur in some capacity; different markets/specializations could allow for this (could depend on mission requirements, orbit, and other factors).

Lifespan

A satellite's actual life is the time between a successful launch and its end of life, when it loses its primary mission (payload failure, bus failure or leaving its operational orbit) or is retired. That is the definition used in The Aerospace Corporation's 2019 Satellite Lifetime Study, which covered satellites over 100 kg launched between 1980 and 2018. It found that design life for US military and civil satellites "has clustered around long design life (>11 years) and the experimental range (1–3 years) with the overall trend of fewer satellite launches." About 87% of the US military and civil satellites and about 75% of the commercial ones met or exceeded their design life.

Lifespan is also determined by fuel capacity. Satellites carry fuel to conduct orbital corrections and to de-orbit at the end of their mission. Operators are also looking for ways to extend lifespan, and companies like Orbit Fab (read our 2019 interview) are working on refuelling satellites in orbit. Our explainer What is satellite refuelling and how close are we to solving it? covers who is trying and how far they have got.

Many satellites in the Aerospace study were "too early to tell". They had been launched too recently to know whether they would reach their design life. Only time will tell which way the actual versus design life trend will go.

Payload applications

All objects in orbit serve to add value to society in one way or another. These can be grouped as:

• terrestrially-focused applications, or "Earth-bound"
• extraterrestrial-focused applications, or "space-bound"

The majority of Earth-bound applications fall into three categories: Communications, Global Navigation and Positioning (GNSS), and Earth Observation (EO). Communications applications include television, telephone, radio, internet and military. GNSS refers to a satellite navigation system with global coverage, providing continuous geopositional data in real-time. The four global systems are GPS (United States), GLONASS (Russia), BeiDou (China), and Galileo (European Union). EO refers to the monitoring of land, ocean, and atmosphere through the use of remote sensors; applications include weather forecasting, deforestation monitoring, managing natural resources, and urban planning. Space-bound applications include: in-orbit services, in-space manufacturing, space observation, deep space exploration.

Case study: K2 Space

K2 Space is a satellite manufacturing startup based in Torrance, California, in the Los Angeles area. It develops large satellites that take advantage of the bigger mass budgets that heavy-lift rockets allow. In 2024 it said its satellites would cost less than $15 million each and take less than three months to deliver.

For most manufacturers, more mass means more capabilities. K2 Space is following the demand: customers want more data, and they want it faster and with less waste. K2 says its vehicles will have the power of high throughput satellites, payload volume of high resolution imaging satellites, and unit economics of small satellite constellations.

Its first large satellite, Gravitas, launched on 30 March 2026 on a SpaceX rideshare. It weighs about two tonnes, and its solar panels span 40 metres. K2's next mission, Trinity, is planned for the second quarter of 2027 and will launch several satellites as the company moves to mass production.

Current launch availability regimes have resulted in an upper limit on how heavy your satellite can be (mass budget). Launch services are also a significant portion of financial budgets, but with trending heavy-launch competition in the 2020's, the price per kg of launch will fall and unlock further capabilities (more mass/power for the same price).

K2's founding pitch was built around Starship, although Gravitas flew on a Falcon 9. Starship, and hopefully other vehicles, will change what satellite builders can do, and K2 Space is placed to take advantage in a fast-paced environment.

Economic framework

The number of satellites launched each year has grown quickly, from about 1,260 in 2020 to about 4,500 in 2025, according to Jonathan McDowell's records. The growth has a direct impact on global communication infrastructure, the application that promises the largest near-term growth potential. Customer demand for internet access, television and radio is the main driver of satellite growth.

The main costs are capital costs: building, launching, and maintaining a satellite or constellation. Across the industry, building satellites earns more than launching them. In 2025, satellite manufacturing revenue was $20.4 billion and commercial launch revenue $12.4 billion, according to the Satellite Industry Association. For a single mission the gap can be wide: TechCrunch put Gravitas's launch at roughly $7.2 million at customer rates, against a $15 million price for the satellite.

New launch capabilities throughout the next decade help drive cost down for satellite operators, expanding opportunities (like K2 Space). Manufacturing costs are also dependent on vehicle design: size, complexity, but also on production strategy: constellation (economies of scale), standardized components, and promised schedule (quick-turn vs long-lead, etc).

Revenue is primarily generated from the sale of services (internet access, TV and radio) from operators (owners of the satellite) to providers. For non-communication applications, revenue models depend on the industry applied: for example, climate change data is often sold to government entities (EPA, NOAA).

The satellite industry is ultimately about gaining additional insight through data, and having that data drive decision-making. The end customer, whether it be a user of internet/GPS services or a government looking for reconnaissance capabilities, drives the operator, manufacturer, and launch provider in the current industry environment.

Establishing a presence in Earth orbit has expanded the dimensionality not only of the information industry, but of humanity: we have moved beyond Earth's two-dimensional surface and have introduced a new axis to the physical space our society's infrastructure occupies.

For military applications, there exists the notion of "the ultimate high ground": Earth orbit provides the ultimate vantage point, which is very attractive to militaries looking for any advantage that can be taken in national security.

This does raise concerns, of course. Should we allow the presence of military organizations to dominate space? What trajectory will this set us on regarding space settlement and exploration?

As mentioned, most current and near-future satellite applications are "Earth-bound". At some point in the future, "space-bound" applications will have a significant impact on what gets built in space: new space stations? orbital settlements? factories in space?

The companies in this piece

Updated 5 October 2026. We corrected and updated this post. The satellite count and orbit altitudes now follow the Union of Concerned Scientists and NASA, and we added a 2026 count. The design-life quote is now complete, the mass classes come from NASA, and the launch growth and cost figures are sourced. We also added K2 Space's progress since 2024, and fixed references to two Q&As, one of which was never published.