Italy's space industry is under mounting pressure to consolidate as defence and government customers increasingly prefer larger suppliers that can manage complex programmes, deliver integrated systems and provide resilient production capacity. The shift is tied to Europe's push for strategic autonomy in defence and critical technologies after Russia's invasion of Ukraine, tensions with China and uncertainty over future U.S. security commitments. Executives say Italy's strength in niche engineering is no longer enough on its own, with customers seeking broader industrial capabilities, while limited access to capital remains a major barrier for smaller companies. Recent financing initiatives, mergers and acquisitions, including Officina Stellare's tie-up with Global Aerospace Technologies Group and D-Orbit's dealmaking, show how companies are trying to build scale without losing the technological specialisation that made them competitive.