Lockheed Martin and the US Department of Defense (DoD) have reached a new framework agreement aimed at rapidly expanding THAAD interceptor manufacturing capacity, boosting annual output fourfold.
The deal will increase output from 96 to 400 units per year, Lockheed Martin said in a press statement on 29 January 2026.
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This agreement follows a similar arrangement announced earlier in the month to accelerate production of PAC-3 Missile Segment Enhancement interceptors.
Lockheed Martin will also begin construction on a Munitions Acceleration Centre in Camden, Arkansas, which will use advanced manufacturing, digital technologies, and robotics for production of THAAD, PAC-3, and other capabilities.
THAAD, which expands to ‘Terminal High Altitude Area Defense’, is designed to intercept short, medium, and intermediate-range ballistic missile threats both inside and outside the atmosphere. It is deployed at strategic sites in the US and abroad.
Lockheed Martin states that the system has demonstrated effectiveness in recent operations and continues to undergo capability upgrades.
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By GlobalDataThe company is committing a multibillion-dollar investment over the next three years to expand production. It intends to modernise over 20 facilities across Arkansas, Alabama, Florida, Massachusetts, and Texas by upgrading manufacturing techniques, tooling, and plant layouts.
The THAAD programme currently employs more than 2,000 staff and operates within more than 340,000ft2 of production space from component fabrication through final assembly.
Since 2016, Lockheed Martin reported a rise of over 220% in deliveries of six critical munitions and plans a further increase of more than 245% for PAC-3 and THAAD systems.
The growth has resulted in a more than 60% increase in manufacturing jobs since US President Donald Trump’s first term, with an additional forecasted rise of around 50% by the end of this decade.
The framework agreement forms part of the Department of Defense’s Acquisition Transformation Strategy, a reform initiative affecting US defence procurement processes.
Lockheed Martin chairman, president, and CEO Jim Taiclet said: “We are committed to further building on the Department of War’s vision for advancing acquisition reform with additional framework agreements for the critical munitions needed by the US military and our allies. Today’s agreement to quadruple THAAD production means we will have more interceptors available than ever before to deter our adversaries.”
In February last year, the US Missile Defense Agency awarded Lockheed Martin a follow-on development contract for THAAD systems with a ceiling value of up to $2.8bn.
