Mitsubishi Heavy Industries Ltd. has received an order to launch a satellite of Inmarsat Inc., a major British mobile satellite communications company, using the H 3. The rocket was expected to be the backbone of Japan's space business in the future.
The current H-2 A rocket has a high success rate of approximately 98%, but it is a struggle to secure orders for commercial satellites due to high launch costs and other factors. Most of the H- 2 A payloads are Japanese satellites.
SpaceX of the United States, which has cut costs through such means as reusing rocket bodies, dominates the market with 61 launches of its Falcon 9 rocket in the past year.
The Falcon 9 costs about 67 million and the H - 2 A about 10 billion, but Mitsubishi Heavy Industries hopes to launch the H 3 rocket for about 5 billion.
In 2022, there were 186 rocket launches worldwide, doubling from the 90 launches in 2017 according to a report by researchers at the Center for Astrophysics Harvard Smithsonian.
The satellite related business is also booming, with some estimates suggesting it will grow from about $16 billion about 2.16 trillion in 2021 to about $27 billion about 3.65 trillion by the end of 2020.
In 2022, when Russia invaded Ukraine, Russia stopped launching satellites from Western countries in response to economic sanctions, which resulted in a severe rocket shortage. This international situation also provided a favorable tailwind for the H 3.
Mitsubishi Heavy Industries, which developed the H 3, is likely to feel the impact of the failed launch.
Sales of rockets and other products in the aerospace, defense and space division were 15.6% of the company's revenues in fiscal 2021, and 15.6% of the company's sales of 3.86 trillion in fiscal 2021. The division includes a number of businesses that were expected to be future earnings powerhouses for Mitsubishi Heavy.
The company pulled out of the Mitsubishi SpaceJet business last month after repeated design changes and delivery delays due to a series of problems with the jetliner. Mitsubishi Heavy Industries invested 1 trillion dollars in developing the plane.
The company's future growth potential is increasingly uncertain when this is combined with the spate of failures in its space business.
Mitsubishi Heavy Industries has never made a statement on the failed launch, but the stock market reacts sensitively to the news. At about 11 a.m. Tuesday when the launch failure hit the headlines, the share price fell to 4,934 on the Tokyo Stock Exchange, down 3.19% from the closing price on June 6.