Mercury's (MRCY) Space-Qualified SSD Powers Satellite System

Mercury Systems’ (NASDAQ:MRCY) TRRUST-Stor 3U VPX RT solid state drive (SSD) has recently been launched as part of a new satellite constellation system into low Earth orbit (LEO). Notably, Mercury’s SSD had been employed by a leading defense prime contractor as part of its satellite constellation system.

SpaceVPX open systems architecture helps customers develop affordable space-qualified products while reducing program risks.

Evolving Space Market

Radiation-exposed space electronics fall into two categories: traditional space, and so-called “new space.” Although the traditional space consists of reliable, long-lasting electronic components, new space primarily comprises lower-cost components adapted for space.

Per Military & Aerospace Electronics, “new space represents an exploding market for future generations of large satellite constellations operating in LEO, which hold the promise of blanketing the Earth’s surface with wireless voice and data communications, access to the Internet, and new kinds of Earth-observing sensor data.”

Moreover, per the latest ResearchandMarkets report, the global space electronics industry is expected to witness a CAGR of 5.22% during 2019-2024.

Mercury Holds an Edge

Mercury has been developing advanced space-grade SSDs and signal processing solutions for space radar applications and space-grade components for high-radiation environments, to enhance its space-qualified product portfolio.

However, a growing market like space electronics market is bound to witness intensifying competition.

Apogee Semiconductor’s multi-faceted approach to produce low-cost radiation-tolerant components is making it increasingly popular among customers. It built a process design kit, TalRad, by collaborating with a commercial process foundry.

Another key competitor to Mercury in this area is BAE Systems (OTC:BAESY) , which produce radiation-hardened components. However, compared to Mercury’s parts, BAE Systems’ components are costlier. This provides Mercury a competitive edge.

Moreover, Mercury’s step of eliminating microprocessors entirely in its SSDs and instead using VHDL code and tables to run its FPGAs has given it a key advantage in the space market. Management believes that this adds more reliability because of the absence of code vulnerabilities that can take a long time to be detected and fixed. This, in turn, is driving adoption of the company’s components.

Notably, the company’s range of space-qualified RF and microwave solutions has been adopted on every successful mission to Mars.

Zacks Rank & Other Stocks to Consider

Mercury currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector are Cirrus Logic, Inc. (NASDAQ:CRUS) and SYNNEX (NYSE:SNX) , each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Cirrus and SYNNEX is currently pegged at 15.27%, and 10.37%, respectively.

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