HiStarlink recently announced the completion of a Series A2 funding round worth more than RMB 500 million, bringing its total financing this year to over RMB 700 million. Since the beginning of 2026, the laser communications sector has recorded at least one financing event every month except May. HiStarlink, Laser Link, Laser Starcom and other companies have raised nearly RMB 1.96 billion in total.
Today, we look at one question: Why is capital pouring into space laser communications?
01 Capital Bets on Space Laser Communications
HiStarlink recently announced the completion of a Series A2 funding round totaling more than RMB 500 million. The round was jointly led by the Xiong’an Science and Technology Innovation Growth Equity Investment Fund and the Wuhan Optics Valley Science and Technology Innovation Industry Investment Fund, with participation from several other institutions. It set a new record for a single financing round in China’s space laser communications sector.
This was HiStarlink’s second major financing round of the year. The company completed a nearly RMB 200 million Series A1 round at the beginning of 2026, bringing its total financing for the year to more than RMB 700 million in just over six months.
Across the industry, according to incomplete statistics compiled by Hello Space, the laser communications sector has recorded financing activity every month in 2026 except May. Total funding raised so far this year has reached RMB 1.96 billion.
Behind this intensive wave of investment is the rapidly rising value of the space laser communications industry.
As the number of satellites in low Earth orbit constellations rises from hundreds to thousands and eventually tens of thousands, bandwidth and transmission-rate requirements for intersatellite data links are growing exponentially. Conventional microwave communications are constrained by scarce spectrum resources and transmission-rate bottlenecks, making them increasingly unable to support large-scale satellite networking.
With advantages including high bandwidth starting at 10 Gbps, high transmission rates, strong resistance to interference and no need for frequency-band applications, laser communications have become a critical solution to this bottleneck.
There is already a clear international precedent. Since the introduction of Starlink V1.5, SpaceX has equipped each satellite with three to four laser terminals. More than 7,000 Starlink satellites are now equipped with laser communications.
The same trend is taking shape in China. Megaconstellations including China SatNet and Spacesail have explicitly made intersatellite laser links standard equipment for their networks. Assuming four terminals per satellite, the first 1,000 satellites in China SatNet’s second-generation system alone would create demand for 4,000 terminals, representing a market worth more than RMB 10 billion. CICC estimates that demand from satellite internet projects could drive the global laser communications terminal market to RMB 50.2 billion.
The ceiling on demand is already visible. However, production capacity, cost and reliability on the supply side will determine how much of this market can actually be realized.
02 How Far Has China’s Space Laser Communications Industry Come?
China’s space laser communications industry has moved beyond technical feasibility and completed the transition to engineering validation. It is now entering the stage of large-scale verification.
In early 2026, a 120 Gbps satellite-to-ground laser communications experiment conducted by the Aerospace Information Research Institute of the Chinese Academy of Sciences achieved acquisition within seconds, a link-establishment success rate of more than 93%, and a maximum continuous communication time of 108 seconds.
In 2025, Laser Starcom completed a 400 Gbps intersatellite communications test and established a stable link across an intersatellite distance of 5,100 kilometers. These results demonstrate that laser communications have moved out of the laboratory and are capable of stable operation, with key data-rate indicators reaching internationally leading levels.
At the engineering-validation level, HiStarlink’s three launches over the past three years reveal a clear path of technological evolution.
First launch, February 2024: The mission successfully demonstrated rapid link establishment within 15 seconds, a transmission rate of 10 Gbps and tracking accuracy better than four microradians. The core optical module withstood high relative angular velocities and severe atmospheric turbulence. This mission answered the basic question of whether a stable connection could be established.
Second launch, September 2024: The HiStarlink Liangxi Twin Satellites completed bidirectional 10 Gbps high-speed communications across intersatellite distances ranging from 100 to 4,000 kilometers. They also conducted two-satellite same-orbit and three-satellite cross-orbit networking experiments, validating multi-satellite laser networking capabilities.
Third launch, May 2025: The first 12 computing satellites of the Three-Body Computing Constellation carried two laser communications terminals each, for a total of 24 terminals. The mission established and operated 11 intersatellite links in orbit, with communication rates of up to 100 Gbps, enabling the large-scale networking of computing satellites.
HiStarlink spaceborne laser communications terminal. Image source: HiStarlink
In May 2025, a Long March 2D launch vehicle lifted off from the Jiuquan Satellite Launch Center and successfully placed the first 12 satellites of the Three-Body Computing Constellation into their planned orbits. The satellites carried 24 HiStarlink laser communications terminals, covering three product categories with transmission rates of 100 Mbps, 10 Gbps and 100 Gbps.
Three launches marked three stages: establishing a link, enabling network connectivity and conducting large-scale verification. Together, they reflect China’s transition from proving that laser communications are technically feasible to demonstrating their engineering maturity.
03 Scaling Up Is the Real Challenge
After the technological breakthroughs, scaling up becomes the real test. Production capacity, cost and reliability are the three major barriers the industry must overcome.
In terms of production capacity, Chinese companies are accelerating their expansion. Laser Starcom has 12 terminals in orbit and annual production capacity of 200 units, with deliveries expected to exceed 100 units in 2026. HiStarlink has nearly 30 terminals in orbit, an in-house development ratio of 65% and annual capacity of nearly 400 units at its Wuxi production line. Laser Link has the capacity to manufacture 1,000 terminals per year.
Terminals are moving from prototypes to standardized products. However, the gap between capacity and demand remains significant. By comparison, SpaceX launched 3,190 satellites in 2025, corresponding to deliveries of more than 10,000 terminals. China’s current production capacity remains far below that level and is not yet sufficient to support the construction of large-scale constellations. Industrial scaling has only just begun.
HiStarlink’s laser communications terminal production line begins operation. Image source: HiStarlink
On September 26, 2024, HiStarlink’s production line at the satellite industry manufacturing base in Liangxi District, Wuxi, officially began operation. It was China’s first production line designed to manufacture nearly 400 laser communications terminals annually.
In terms of cost, industry estimates place the current production cost of a spaceborne laser communications terminal in China at approximately RMB 1.5 million. Supporting constellations containing thousands of satellites will require costs to fall further, which in turn will require coordinated progress in design optimization, supply-chain maturity and automated production.
In terms of reliability, validating one or two satellites is fundamentally different from sustaining stable operations across hundreds of satellites. Moving from single-link tests to network-level verification requires solutions to systemic challenges including multi-satellite coordination, software reliability and adaptability to extreme space environments.
04 Why Did HiStarlink Secure This Funding?
Investors are placing substantial bets on the company’s proven in-orbit performance, mass-production capabilities and system-level development strategy.
HiStarlink currently has nearly 30 terminals in orbit and has successfully established 11 stable intersatellite links, making it the only Chinese company with more than ten operational links in orbit. As the principal communications payload supplier for the Three-Body Computing Constellation, it will continue delivering products in line with the constellation’s development plan, further expanding the range of in-orbit applications.
Computing constellation equipped with laser communications terminals. Image source: HiStarlink
On May 14, 2025, the first group of satellites under ADA Space’s Star-Compute Program successfully entered orbit, marking the deployment of the world’s first space computing satellite constellation. Each of the 12 computing satellites carried two HiStarlink spaceborne laser communications terminals, enabling networked connectivity among the satellites.
Once a product has demonstrated its capabilities in orbit, mass-production capacity determines whether it can be delivered at scale. HiStarlink’s Wuxi production line currently has annual capacity of nearly 400 units, while more than 65% of its core components are developed in-house. It is one of the few Chinese companies capable of large-scale production.
The newly raised funding of more than RMB 500 million will be directed primarily toward the development of ultra-high-speed laser communications networking products, production-capacity expansion and the development of new application scenarios.
Beyond spaceborne terminals, HiStarlink is also expanding its system-level capabilities. It is one of the few commercial space companies in China with an integrated engineering capability spanning terminal development, ground systems and in-orbit networking.
Funding raised at the beginning of the year was directed primarily toward the construction of optical ground transceiver systems, strengthening the ground hubs of an integrated space-ground network. From orbit to the ground and from individual terminals to complete networks, the company’s financing is tied to clearly defined technical objectives as it deepens its presence around constellation-networking requirements.
05 Will Laser Communications Become Standard Equipment?
The answer is yes. This trend is becoming clear across three dimensions.
First, satellite internet and space computing are simultaneously increasing demand for onboard communications. As discussed above, the China SatNet and Spacesail constellations alone could generate demand for nearly 100,000 terminals. Combined with the deployment of space computing projects such as the Three-Body Computing Constellation, demand for intersatellite data transmission is rising exponentially.
Microwave communications can no longer accommodate data transmission on this scale. With their high bandwidth and transmission rates, laser communications are becoming increasingly indispensable.
Second, cost, performance and mass-production capacity are beginning to form a positive feedback loop. As the cost of an individual terminal has fallen from more than RMB 10 million in the early stages to around RMB 1 million today—and continues moving lower—the economics of large-scale deployment are becoming increasingly viable.
The higher procurement volumes and greater production-line efficiency created by mass deployment will, in turn, drive costs down further. Once this cycle begins, the transition of laser communications from optional equipment to standard infrastructure will be difficult to reverse.
Third, industrial scaling has already begun. As reusable launch vehicle technology achieves substantive breakthroughs, launch costs are expected to decline and constellations will move into full-scale network deployment.
Laser communications terminals are transitioning from prototypes to products and from single-unit validation to batch delivery. The industrialization of laser communications is moving from a plan on paper to operational reality.
Outlook
A funding round worth more than RMB 500 million does not mean that space laser communications have already entered a mature market. China still needs to address cost, production capacity and long-term in-orbit reliability before the technology can truly support constellations comprising thousands or even tens of thousands of satellites.
The industry’s direction, however, is becoming increasingly clear. As satellite internet and space computing develop, laser communications will determine whether entire constellations can operate as efficient, interconnected networks.
Space laser communications are evolving from a critical technology into foundational infrastructure for the constellations of the future.
