Federal government bans the sale of laser satellite technology to China
As of: 4:16 p.m. | Reading time: 4 minutes
Berlin stops the laser technology specialist Mynaric. The company immediately breaks off all business contacts in Beijing. A very rare and remarkable process. Now Mynaric is hoping for another, quite prominent customer.
Es seldom happens that the federal government prohibits German companies from doing business with China. However, the young German company Mynaric, a specialist in satellite communication using laser beams, has received a prohibition notice from Berlin for doing business with Beijing. The listed company from Oberpaffenhofen near Munich immediately asserted that no technology had yet been delivered to China. According to the ban on delivery, all business contacts and activities would now be broken off, according to a message. Instead, Mynaric is now hoping for an order from the Pentagon.
The ban on deliveries to China is remarkable because Mynaric is developing communication technology for the future market of mega satellite fleets. Projects such as the Starlink project by technology entrepreneur Elon Musk or a project by Amazon founder Jeff Bezos will see fleets with thousands of satellites in space in the next few years. They are designed to provide internet access to billions of people around the world. Elon Musk has already transported 540 satellites into space within a year, making it the world’s largest satellite operator. But the military are also interested in the technology that is considered to be bug-proof.
The satellites are to communicate with each other and with ground stations via laser light data connections. In some cases, distances over several thousand kilometers are to be bridged. The technology is already working. The process was developed at the German Aerospace Center (DLR). Mynaric was founded ten years ago. The company sees itself as the world leader in technology. Mynaric is still at the very beginning with around 140 employees and a turnover of EUR 400,000 and a loss of EUR 7.8 million (2019). But a huge market in laser satellite communication is expected. 2020 was the key year for corporate development, Mynaric said.
According to the information, there were plans at an advanced stage to “sell business with China through a buyout”. Insiders speak of a planned spin-off of China activities through a management buyout. As a precaution, the company in Berlin asked for official clarification, but received a prohibition notice. At Mynaric, it is said on request that a 1.7 million euro order with China will be canceled. “This intervention to protect foreign interests demonstrates the geopolitical importance of laser communication and the strategic importance of Mynaric products,” the company writes.
Mynaric turns towards the USA
Mynaric CEO Bulent Altan, an ex-manager of SpaceX, who has been in office since 2019, said of the stop in China: “We were always aware that laser communication will be perceived as a key technology at some point and will therefore become the focus of national security interests.” that Mynaric is now trying to win a Pentagon contract in the United States. Reference is made to an indirect participation in the tender of the new US agency Space Development Agency (SDA) for a fleet of high-security satellites for the US government.
In 2019, in addition to building its own space force, the United States also founded an agency for space defense high-tech. The agency plans to “build one or more constellations of hundreds of satellites for communication and missile tracking”. The satellites are said to fly low in order to send the data to Earth only with a mini time delay. Initial tests are planned for 2022. The US agency points out that although there are several providers for optical terminals, there is still no industry standard. One of the companies that has worked with the Pentagon in this area so far is the US company General Atomics Electromagnetic Systems.
As the industry says, it would be completely out of the question for a company to deliver its technology to China while participating in a U.S. security network. With the prohibition of deliveries to China, Berlin may be doing a service to the United States, because it would now have access to it, speculates among insiders. The US may also have put pressure to keep security-critical technology from falling into the hands of Beijing, another speculation. In Mynaric circles, the Berlin China export freeze is also called evidence of a dilemma of high-tech start-up companies if they want to initiate business with the USA and China.
So far, prohibitions on China business from German security interests have been rare. In the summer of 2018, the German government prevented a Chinese company from joining the power grid operator 50 Hertz. In autumn 2018, the sale of the special machine company Leifeld Metal to a Chinese investor failed. After the Chinese shopping spree at German companies, for example with the takeover of the robot manufacturer Kuka in 2016, the Bundestag decided in June to tighten the foreign trade law. This should make it more difficult to take over strategically important German companies from abroad. In the future, the state can intervene if it suspects an “expected impairment” of public security. Previously, an “actual risk” was decisive.