How Hughes Network Systems could bring satellite terminal manufacturing down to Earth

Satellite telecom has deep roots in Washington's Maryland exurbs – the former COMSAT Labs building has been a landmark along Interstate 270 for decades – but in recent years, an unusual green shoot has sprouted up for the industry here: manufacturing.

By building satellite terminals in a factory opened just off that highway this year, EchoStar-owned Hughes Network Systems has chosen a different trajectory than that of competitors that still rely on outsourced production of consumer hardware even as the risks of overexposure to Chinese suppliers have become more apparent.

"We're kind of a rare breed in Maryland, doing production work here," said Eric Lee, senior vice president of operations and general manager at the facility, during an August 5 visit.

The building has just over 106,000 square feet of manufacturing space, in which 130 full-time employees and 200 contractors, most clocking into one of two shifts that run from 6 a.m. through 11 p.m., work with assistance from 50 robots to build terminals for Hughes' own geostationary-Earth orbit broadband and for OneWeb's low-Earth orbit satellite service.

"It's very, very traditional manufacturing," Lee said. "It's not just a box build."

(Source: Hughes Network Systems)

On Tuesday, Hughes announced that it had shipped more than 5,000 HL1120W OneWeb terminals since it began delivering them in April. Those devices for enterprise and government customers use an electronically steerable antenna to communicate with the 618-satellite constellation that the British firm completed deploying in March. Hughes and OneWeb's ties go back farther than that: In 2021, the EchoStar subsidiary participated in a funding round for formerly bankrupt OneWeb, which merged with Eutelsat in September.

(Source: Hughes Network Systems)

Human-robot teamwork

A walk through the factory floor showed how Hughes has pushed the iterative adoption of automation to chisel away at its costs.

A line to build OneWeb receivers featured multiple handoffs from robots to humans. For example, after one robot applied a gasket compound around an antenna housing, taking just under 14 seconds to complete that task, humans took over to attach internal components. Then, humans tested the finished assemblies at a series of stations, including one under a tent just outside, where the hardware could pick up OneWeb's satellite signal and employees could enjoy the sight of the landscaping next to the factory's walls.

One finishing task, applying a hydrophobic coating to the exterior of the antenna that sent water droplets skittering away when I breathed on them, will soon be handed off to robots that will take the place of people with paint rollers.

"We first build six months, then we evaluate where the labor costs are going," said Kamal Shah, senior vice president of operations and assistant general manager.

On another line, workers assembled indoor units for Hughes satellite customers – a job once outsourced to Chinese facilities.

"We brought it back here because we can do it at a cheaper cost and much better quality," Shah said. He pointed to a Fuzion surface-mount-technology assembly system that plucked components off reels to fasten them to printed circuit boards and said that in China, dozens of people would have to eyeball this kind of work.

In the Germantown facility, one inspector monitored a 3D camera's assessment of the process.

Further down the line, robots precisely assembled radio units, fastening sets of screws in unison. Shah said Hughes is now looking to see if it can assign the task of attaching heat sinks to boards to robots.

"We look constantly for any opportunity to automate things and take the labor out," he said. That, however, has not come at a cost in overall human employment: "The workforce has been pretty consistent."

(Source: Hughes Network Systems)

A long goodbye to GEO

The customer base for Hughes' traditional satellite broadband has continued to shrink even with such advances as the massive Jupiter 3 satellite launched last year – SpaceX's Starlink LEO service quickly established speed, latency and capacity advantages that geostationary services either struggle to match or have no hope of matching.

"The strategy is to maintain the customers," Lee said of Hughes' GEO broadband business. "We're not really spending marketing dollars like we used to."

But Hughes' relationship with OneWeb means the ground is no longer the limit for potential customers – OneWeb's bid with Intelsat for the inflight-connectivity market opens up other possible customers for the Germantown factory.

A compact white fairing on a shelf in the factory away from the main assembly lines points to the approaching debut of one such new market. That aerodynamic cover hides the Hughes-designed HDX antenna that will link business jets to Gogo's Galileo OneWeb-based service, which that firm is pitching as an upgrade from its older air-to-ground bizjet service.

Hughes now awaits Federal Aviation Administration certification of that system.

Lee cited "proximity to the government" as a competitive advantage for Hughes in this location. But just over two years after the July 2022 passage of the CHIPS and Science Act, he said that the bill and its subsidies for domestic electronics manufacturing have yet to touch this operation. Nor, he and Shah added, have too many politicians shown up to commend their effort or take credit for it.

In one aspect, Hughes' spot in what Maryland markets as the "I-270 Technology Corridor" comes with a complication the company might not have elsewhere: demand for technologically skilled employees from the cluster of biotech firms near this highway.

Says Lee: "We've got a lot of competition from Amgen and those guys picking up our supporting staff."