The U.S. Department of Defense has inked a deal with Lockheed Martin Corporation worth up to 35 billion USD to procure hundreds of Terminal High Altitude Area Defense (THAAD) interceptor missiles annually over the next seven years. This acquisition aims to replenish the U.S. missile stockpile, which has been depleted due to ongoing conflicts in the Middle East.
The Wall Street Journal reported on Wednesday that this agreement follows a 4.7 billion USD contract signed in April to boost Patriot missile production. Both deals are classified as undefinitized contracts, requiring additional congressional budget approval. THAAD interceptors are cutting-edge weapons designed to neutralize ballistic missiles outside Earth’s atmosphere, with each unit carrying a price tag of over 12 million USD.
The contract announcement came during a high-level meeting at the White House, where President Donald Trump urged military brass and defense industry Chief Executive Officers (CEOs) to ramp up production. The Pentagon has been spearheading a campaign since last year to incentivize companies to expand their manufacturing capabilities, promising substantial long-term contracts to ensure steady revenue streams.
In January, Lockheed Martin Corporation announced plans to increase THAAD production in response to growing domestic demand. As part of an extensive production expansion strategy, the company has broken ground on a new facility in Alabama, with plans to invest over 9 billion USD by 2030.