The space basket: seven names across two angles

Picking up from Thursday. The SpaceX IPO is the catalyst that's about to wake up a lot of capital to the broader space theme, and the two angles I'm focused on both pay regardless of what the equity itself does.

Quick recap before the basket. The first angle is the semiconductor supply chain running Starlink. The second is Space Domain Awareness, the tracking and deconfliction infrastructure keeping LEO orbits viable. Here's the framework for both before we get to the names.

Starlink terminals are at the heart of this angle, because each one is a small electronics factory built around a phased-array antenna. Instead of a single big dish that mechanically swivels to track a satellite, the antenna is a flat panel made up of hundreds of tiny antennas that steer the signal electronically, like a stadium wave run by a computer.

Each of those small antennas is paired with an RF front-end module, which is the actual radio doing the sending and receiving, and STMicroelectronics supplies the bulk of those chips. Beyond the antenna itself, every terminal also runs a custom onboard processor, a smaller housekeeping chip that handles temperatures and routine commands, a hardware security vault holding encryption keys, a GPS module so the dish knows where it sits on Earth, and a Wi-Fi/router chip that lets your laptop connect once the dish has the satellite signal.

The cost flywheel sits at the center of the thesis. More subscribers drive more terminal production, which drives semiconductor volume, which compresses unit costs, which lowers the barrier to subscriber adoption, which drives more subscribers. The S-1 confirmed that user-terminal costs have fallen by well over half since 2022, and the chip suppliers are the mechanism behind that compression.

Two things complicate the picture. SpaceX disclosed in the S-1 that it doesn't maintain long-term contracts with many of its direct chip suppliers, which means the revenue visibility is real while orders are flowing but contractually thin. And Terafab, the SpaceX, Tesla, and xAI joint semiconductor facility in East Texas, is targeting vertical integration over time. Industry analyst Ming-Chi Kuo's recent supply chain survey suggests Intel's 14A process design kit won't mature until the latter half of 2026, which pushes meaningful pilot production into 2028 or later. The near-term supplier picture stays intact, and the medium-term is what you watch.

Once you have tens of thousands of satellites in low Earth orbit, the bottleneck shifts from getting them up there to keeping them flying once they arrive.

Several space insurance specialists have warned that certain crowded LEO orbits may become effectively uninsurable later this decade without better tracking and deconfliction. The math is roughly physics: a one-centimeter metal fragment moving at around 17,500 mph carries kinetic energy in the range of a hand grenade. Constellation operators are increasingly being asked by their underwriters for high-fidelity tracking data, real-time collision prediction, and active deconfliction services.

The architecture of tracking has three layers worth understanding. Ground-based phased-array radar tracks non-cooperative debris from below the atmosphere, sending out millions of coordinated radio waves to map fragments down to the size of a marble. Space-based optical and infrared sensors track from above, looking outward to detect heat signatures against the cold backdrop of space. And laser ranging fills in the centimeter-level accuracy where you need to know exactly where an operational satellite sits, second by second.

The companies that build and operate those layers get to charge recurring software margins on top of hardware that sovereign defense budgets have already paid for. That structure is what makes this an investable theme rather than a pure defense-contracting story.

The rest of this issue is for Insider members including the basket of both angles and how I’m covering them. Upgrade to keep reading. Insider also gets you the full archive and every week's names.