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Rocket Lab Secures Contract to Expand Semiconductor Manufacturing

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Rocket Lab USA, Inc. (RKLB - Free Report) recently clinched a $23.9 million award from the U.S. Department of Commerce to enhance its compound semiconductor manufacturing capabilities at its Albuquerque, NM facility. These semiconductors, used in space-grade solar cells, help power satellites and play a crucial role in national security and commercial applications.

RKLB’s Role in the Satellite Solar Cell Materials Market

The satellite solar cell materials market has been experiencing significant growth in recent times, driven by expanding satellite applications across military, surveillance, scientific and commercial domains. Government investments in satellite programs for national security, environmental monitoring and advanced communication networks are fuelling demand for high-performance solar cells used in satellites.

Additionally, rising space exploration efforts, coupled with the increasing need for satellite-based services such as broadband internet, weather forecasting and remote sensing, are further boosting the market.

This must have prompted Polaris Market Research to estimate that the global satellite solar cell materials market size will grow to $111.46 billion by 2032 at a compound annual growth rate of 13.2%.

Rocket Lab stands to gain from the aforementioned market growth opportunities, as it specializes in the production of highly efficient, radiation-hardened space-grade solar cells. With more than 25 years of expertise, the company’s Albuquerque facility has delivered above 4 megawatts of power to more than 1,100 satellites in orbit, supporting key missions like NASA’s Artemis lunar program and the James Webb Space Telescope as well as numerous commercial telecommunications satellites.
 
This new award to expand its Albuquerque facility’s manufacturing capacities is likely to further bolster RKLB’s position in the market and fetch solid revenues.

RKLB’s Peers

Other companies that are expected to enjoy the perks of the expanding global satellite solar cell materials market have been discussed below.

Northrop Grumman Corporation (NOC - Free Report) : It is deeply involved in space systems, including satellites. The company develops and integrates advanced solar arrays and other power systems critical for satellite operations, particularly for defense and surveillance missions.

NOC has a long-term (three to five years) earnings growth rate of 19.1%. The Zacks Consensus Estimate for NOC’s 2024 sales indicates year-over-year growth of 5.3%.

The Boeing Company (BA - Free Report) : Its Spectrolab subsidiary is a manufacturer of solar cells that are used to power satellites. Spectrolab has produced more than 6.5 million gallium-arsenide solar cells for more than 1,000 spacecraft over the last 65 years.

Boeing has a long-term earnings growth rate of 19.3%. The Zacks Consensus Estimate for BA’s 2025 sales indicates year-over-year growth of 23.4%.

Lockheed Martin Corporation (LMT - Free Report) : It manufactures high-quality small satellite solar arrays. One such product is the Technology Readiness Level 9, which is available in multiple wing configurations and can deliver power levels of up to 2,000 watts.

Lockheed has a long-term earnings growth rate of 4.5%. The consensus estimate for LMT’s 2024 sales indicates year-over-year growth of 5.5%.

RKLB Stock’s Price Movement

Shares of RKLB have gained 142.5% in the past month compared with the industry’s 2.6% growth.

Zacks Investment Research
Image Source: Zacks Investment Research

RKLB’s Zacks Rank

RKLB currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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