L3 Harris has made smart investments in a good area of communications
L3Harris Technologies, Inc. (LHX), a defense company, said it would invest in a company making a new generation of communication systems is an essential step for the company as it moves to the next stage of its growth. Last week, L3Harris said it would invest €11.2 million in a German company called Mynaric, giving it a 7.2% stake. L3Harris already uses laser communication terminals made by Mynaric, and recently the company’s innovations in a new space communication system. Now, L3Harris will use Mynaric solutions in more places, even in space.
Many of the satellites that L3Harris will make at its new big plant are probably around laser transceivers. For L3Harris, it’s essential to stay in the defense industry, especially in the communications field, which the company has long led. Now is the time for new technologies. For example, laser communication is faster, less noisy, and more secretive. Lasers are generally better for space than radios because they don’t need big antennas, which are hard to “pack” under a rocket’s cover. But this market is already becoming a very competitive place.
Even Sony Corp. (SONY) is getting into the laser transceiver market because it “remembers” being a pioneer. By getting a piece of Mynaric, L3Harris lowers the chance it will lose access to technologies it needs to get a significant share of promising markets. L3Harris and Mynaric have already said they will work together more on making and testing new laser communications between space and earth. But it’s important to note that Mynaric works with other companies, including those competing with L3Harris. Northrop Grumman sees Mynaric as a critical supplier in particular.
