Washington D.C. – The U.S. Department of Defense has announced a contract worth over $2 billion with defense conglomerate Lockheed Martin to produce a significant number of additional interceptors for the Terminal High Altitude Area Defense (THAAD) system. This decision comes shortly after reports indicated that the U.S. military had expended as much as a quarter of its entire THAAD missile stockpile while defending Israel during a confrontation with Iran earlier this year.
Details of the Billion-Dollar Contract
According to the official announcement from the Pentagon, Lockheed Martin has been awarded a contract modification (P00105) valued at precisely $2.06 billion. This funding falls under the original contract (HQ0147-17-C-0032) and raises the total value of the current THAAD production agreement from $8.35 billion to over $10.4 billion.
Production of the THAAD system components will take place at various Lockheed Martin facilities across the United States, including plants in Dallas, Texas; Sunnyvale, California; Troy, Alabama; and Camden, Arkansas. The contract's period of performance is expected to extend through December 1, 2029.
Context: Expended "At a Staggering Rate"
The announcement of the new contract came just days after reputable defense news outlets like The War Zone and The Wall Street Journal revealed the extent of THAAD missile usage during the 12-day conflict between Iran and Israel earlier in 2025.
Unnamed U.S. defense sources reported that American forces fired over 150 THAAD interceptors to shoot down waves of Iranian ballistic missile attacks. The Wall Street Journal quoted one official who noted, "Operating alongside Israeli systems, THAAD operators were burning through their ammunition at a staggering rate."
If confirmed, this number would account for approximately 25% of the total THAAD missiles the U.S. military has ever ordered or planned to produce, highlighting the immense rate of expenditure and the urgent need to replenish stockpiles.
THAAD: A Pillar of U.S. Missile Defense
The THAAD system, manufactured by Lockheed Martin Missiles and Fire Control, is one of the core pillars of the United States' multi-layered ballistic missile defense architecture. It is specifically designed to destroy short- to medium-range ballistic missiles in their terminal phase, just before they reach their targets.
A unique feature of THAAD is its "hit-to-kill" kinetic energy technology, which destroys incoming threats through direct impact without an explosive warhead, minimizing the risk of debris from the target.
Over the past decade, the Pentagon has steadily expanded the system's deployment footprint globally, with batteries stationed in Guam, South Korea, and the continental U.S. Its effective use in the Middle East, in seamless coordination with Israeli defense systems, has highlighted its operational integration with allied forces.
The latest contract is expected to rapidly backfill the U.S. strategic stockpile while also continuing to supply components for both domestic use and allied customers. Previously, Lockheed Martin has supplied the THAAD system to the United Arab Emirates (UAE) and Saudi Arabia.
