By early next year, a Taiwanese startup hopes to become the first foreign company to launch a rocket from Japan as part of a strategy supporters of the sector believe would help Tokyo realize its goal of becoming an Asian space hub.

Regulations and concerns about whether Japan should accept foreign enterprise in the context of its efforts to quadruple the size of its 4 trillion yen ($26 billion) space industry over the next ten years have caused delays and obstacles to TiSpace’s scheduled suborbital launch.

Current and former Taiwanese space agency officials co-founded the private company in 2016, however it hasn’t launched successfully. An oxidizer leak caused its most recent attempt to launch a rocket, which took place in 2022 via its sibling business AtSpace in Australia, to fail. There will be a different design of rocket tested in Japan.

“This (planned launch) should be a very good case for the Japanese government,” TiSpace chairman Yen-sen Chen told Reuters in an interview. “If that goes smoothly, then you will attract more customers from other countries.”

He stated that in order to launch the company’s 12-meter (39-foot) sounding rocket by early 2025, he is awaiting one more regulatory approval—a radio permission. While a sounding rocket can travel to space, it cannot enter orbit.

According to some observers, China, which monitors Taiwan’s developments in missile-related technologies and claims Taiwan as its own despite the strong objections of the Taipei administration, might become involved if a Taiwanese rocket is launched in Japan. However, Chen stated that he had not yet heard of such worries.

As for the launch, China’s foreign ministry stated that it was “not aware of the relevant circumstances”.

According to the Cabinet Office of Japan, “free economic and research activities are guaranteed in Japan within the scope of laws and regulations”. March 2023 saw a “courtesy visit” between an official from Taiwan’s de facto embassy in Japan and TiSpace. The embassy declined to provide any details, citing the launch as a private sector matter.

The only other Taiwanese business making launches is TiSpace. Wu Jong-shinn, one of the other co-founders of the business, is currently in charge of Taiwan’s space agency. The agency stated that all of its launch services are carried out through public tenders, but it declined to comment on its relationship with TiSpace.

Japanese space companies have shown support for the company’s endeavor, particularly in the far-flung agricultural town of Taiki on the northern island of Hokkaido, which is set to host the launch. Experts and officials list the advantages of bringing in international businesses.

Legislator Yuko Nakagawa of the ruling party, who represents Taiki and the surrounding areas, described TiSpace’s project as “a symbol of Taiwan-Japan friendship” and a boon to a worldwide commercial complex known as a “space Silicon Valley” by local officials.

According to the most recent government plans, Japan wants its commercial space industry to be valued over $50 billion by the early 2030s, launch 30 rockets annually, and establish itself as Asia’s space transportation hub.

The top Cabinet Office official in charge of Japan’s space policy, Jun Kazeki, declined to comment on TiSpace’s ambitions. He stated that although “future possibilities to utilise overseas transportation technologies” exist, the government’s first goal is still Japanese rockets.

Typically, Japanese-built boosters like the Mitsubishi Heavy Industries (7011.T) H3 are used for government launches. Outside of Japan, private satellite operators frequently work with international launch providers like SpaceX and ArianeGroup.

Senior Japanese space industry officials issued a warning, stating that tight government oversight and significant regulatory obstacles would be necessary for a foreign business to launch orbital payloads from Japan.

The central government does not have to grant final approval for the launch because sub-orbital launches, like the one conducted by TiSpace, are exempt from Japan’s Space Activities Act. Tokyo intends to amend the law to allow for reusable rockets and suborbital flights, but it will likely take years to make the changes.

Regional Industry

Opposition legislator Motoko Mizuno, a former employee of Japan’s space agency JAXA, expressed her caution about Japan opening up to international businesses because she believed indigenous launchers might not be able to compete on price.

Japan and the US are negotiating a space technology safeguards agreement that may open the door to US commercial launches from Japan.

Though the nation’s private rocket industry is still in its infancy, JAXA has been launching rockets manufactured domestically for decades.

The rocket of Space One, supported by the aerospace behemoth IHI (7013.T), blew up during its maiden flight in March. The Japanese company Interstellar Technologies, based in Taiki, made history in 2019 when it launched a sounding rocket into space. However, the company has not yet conducted an orbital launch.

A few European businesses have shown interest in Space Cotan’s launch facility, according to Yoshinori Odagiri, CEO of the company that runs Taiki’s Hokkaido Spaceport.

TiSpace’s success in Hokkaido, according to Tadashi Morimitsu, a local politician in southwest prefecture of Oita, another emerging space hub in Japan that is collaborating with the American spaceplane company Sierra Space, captures a “welcome phenomenon” of foreign space businesses using Japanese spaceports.

More than fifty spaceports are being built worldwide, but according to Boston Consulting Group principal Alessio Bonucci, “they may end up with maybe five to ten which can be truly successful and self sustaining in the long term.”

In order to better serve Japanese clients, TiSpace said it intends to increase its manufacturing capacity in Japan following the success of its test launch.

Letara, a company located in Hokkaido, is one such prospective customer that has already asked if TiSpace can transport its satellite propulsion system to space for testing.

Letara co-founder Shota Hirai stated, “We don’t ask if the company is domestic or foreign, as long as they can launch.”