Amazon.com Inc (NASDAQ:AMZN) has said it will open a new 172,000-square-foot factory in a suburb of Seattle in Washington state, amid plans to create a satellite network aimed at providing high-speed broadband.
First unveiled in 2019, Project Kuiper will see 3,236 satellites placed in low Earth orbit, contesting with Elon Musk's SpaceX network, with Amazon set to invest over US$10bn in the plan which was given the go-ahead in 2020 by the US Federal Communications Commission (FCC).
Currently, the first two prototype satellites are in development, with Dave Limp, Amazon devices chief, telling The Washington Post in an interview on Thursday, that they are expected to be finished by the end of the year and launched in early 2023.
Additional plant capacity will see Amazon enter the second phase of the manufacturing process, Limp added in the newspaper interview, with FCC rules requiring half the network - 1,600 satellites - to be in place by 2026.
Amazon’s new factory will complement a 219,000-square-foot facility which is already operating in Washington state, with Amazon noting that “to deliver on our vision for the project, we need to operate on a much larger scale”.
The investment plans came the same day as Amazon.com became the latest tech giant to disappoint the market as its third quarter revenues missed Street forecasts and it lowered guidance for the fourth quarter.
The company said it expects to post fourth-quarter revenue between $140 billion and $148 billion, representing growth of 2% to 8%, well below current analyst forecasts of around $155.15 billion (according to Refinitiv).
The numbers reflect an adverse forex hit of around 460 basis points and the group forecast operating income for the fourth quarter of between $0 and $4.0 billion, compared with $3.5 billion in the fourth quarter 2021.