• Two new companies target low-cost, scalable satellite production as China pushes commercial space growth.
• New ventures draw on legacy ‘Dongfanghong’ heritage as Hangzhou scales up its commercial space manufacturing push

Hangzhou is stepping up its push into commercial space, with two new satellite component companies launched by a state-backed research institute as China accelerates development of its aerospace supply chain.

The China Academy of Space Technology (CAST) on March 16 established Dongfanghong Laser and Dongfanghong Energy in the city’s Xihu district, marking a further expansion of Hangzhou’s ambitions to build a full-fledged commercial aerospace ecosystem.

The launch coincided with the signing of 10 additional projects across the city’s sprawling space industry value chain.

Backed by CAST, the two firms will focus on products aimed at lowering costs and enabling mass deployment of commercial satellites, including foldable and rollable flexible solar arrays — critical components that power spacecraft — as well as laser communication terminals.

“Flexible solar arrays and laser terminals are key components of commercial satellites,” a representative from CAST’s Hangzhou center said, speaking on condition of anonymity. “Solar arrays are the core energy source of spacecraft.”

Flexible solar panels offer significant advantages over traditional rigid designs. For the same power output, foldable versions can reduce launch volume to about one-sixth and cut weight by at least 30%, helping lower launch costs.

Laser communication terminals, meanwhile, are designed to enable high-speed data transmission between satellites, forming what industry players describe as an “information highway” in orbit.

Since establishing its Hangzhou center in 2019, CAST has scaled up development of laser communication technology from small-batch testing to wider deployment. By the end of 2025, more than 150 in-orbit communication links had been established.

Following multiple product iterations over the years, the cost of laser terminals has fallen sharply from tens of millions of yuan to around one million yuan, while weight has nearly halved, according to Li Shuai, head of R&D at Hangzhou Aerospace Dongfanghong Laser Communication Co. Dongfanghong was the name of China’s first satellite program.

The improvements have made the technology more commercially viable as China’s private space sector takes off.

The creation of the two companies signals a shift from limited production runs toward industrial-scale manufacturing. Plans call for annual capacity to reach 1,000 sets of flexible solar arrays by 2027, while laser terminal output is expected to exceed 4,000 units per year.

Xihu district has emerged as a key hub in Hangzhou’s commercial space ambitions. Anchored by the Yunqi Town, a high-tech cluster, the area hosts more than 300 aerospace-related companies and has been designated as a provincial pilot zone for future space industries.

Since 2021, cooperation between CAST and local authorities has resulted in 15 production lines capable of supporting about 300 satellites annually.

Hangzhou’s push aligns with China’s broader industrial policy goals. The country’s latest 15th Five-Year Plan calls for accelerating growth in strategic emerging sectors, including aerospace.