The US Government has taken steps to significantly increase its production capacity for Terminal High Altitude Area Defense (THAAD) interceptors, awarding Lockheed Martin a contract worth up to $35bn.
The move, which will see THAAD output quadruple, is part of a broader effort to strengthen national and allied missile defence capabilities through increased industrial output.
Under the seven-year undefinitised contract action announced on 24 June 2026, Lockheed Martin will increase manufacturing through 2030, with the US Department of War (DoW) highlighting the award as a key part of its Acquisition Transformation Strategy.
This strategy aims to shift from limited framework agreements to fully executed, multiyear procurement contracts, signalling a long-term demand for critical military technology.
The contract builds upon a THAAD framework agreement signed in January between the DoW and Lockheed Martin. The agreement is intended to accelerate both production and delivery of missile defence systems, providing stability and visibility for Lockheed Martin’s operations and wider defence supply chains.
Lockheed Martin missiles and fire control president Tim Cahill said: “This award reflects our shared vision with the Department of War to strengthen America’s Arsenal of Freedom through a transformational shift to multiyear procurement.
“This new approach propels our efforts to strengthen the defence industrial base, expand production and deliver capabilities to the American warfighter at unprecedented speed and scale.”
The THAAD system, part of the US ballistic missile defence (BMD) architecture, is designed to counter short-, medium-, and intermediate-range ballistic missile threats. It employs “hit-to-kill” interceptor missiles and can engage targets at ranges of up to 200km and altitudes of up to 150km.
According to Lockheed Martin, THAAD is the only US system engineered to intercept missiles both inside and outside the Earth’s atmosphere.
A Congressional Research Service report notes that a typical THAAD battery includes about 95 soldiers, six mobile launchers, 48 interceptors, a radar system, and associated fire-control and communications equipment, although the exact configuration can vary.
This latest contract follows a series of recent expansion moves by Lockheed Martin. Weeks earlier, the company broke ground on a new Munitions Production Center in Troy, Alabama, as part of a more than $9bn investment plan through 2030.
Lockheed Martin has also opened a Next Generation Interceptor facility in Courtland, Alabama, and a Munitions Acceleration Center in Camden, Arkansas.
The award also builds on a March agreement between the DoW, Lockheed Martin, and BAE Systems to quadruple production of THAAD interceptor seekers, a critical components that use advanced sensors to detect and guide intercepts against high-speed ballistic threats.
