In a significant development for defense capabilities, Lockheed Martin and the Pentagon have entered into an agreement aimed at significantly increasing the production of the Patriot PAC-3 Missile Segment Enhancement (MSE) interceptor over the next seven years. This deal will see annual production jump from 600 to an impressive 2,000 missiles by the end of 2030, a threefold increase that underscores the growing demand for advanced missile defense systems.
Jim Taiclet, President and CEO of Lockheed Martin, indicated that achieving this ambitious production rate will require a phased ramp-up across the company’s factories and supply chain. This move aligns with the Pentagon’s Acquisition Transformation Strategy, which seeks to provide longer-term demand signals. This framework is designed to encourage industry investments and enhance production capacities needed to address evolving security challenges globally.
In addition to ramping up production, the strategy incorporates a collaborative financing approach that ensures initial cash neutrality, thereby allowing companies in the defense sector to invest with confidence to meet increased production requirements. However, this production increase is contingent upon the approval of additional fiscal year 2026 funding by Congress, which is currently under review. Pentagon officials expressed optimism regarding alignment with lawmakers but acknowledged that further discussions are necessary.
The PAC-3 MSE missile is a critical component of the Patriot air and missile defense system, which is utilized by 17 partner nations, including Bahrain, Poland, and Ukraine. This advanced missile boasts a dual-pulse rocket motor, enhanced maneuverability, and improved “hit-to-kill” technology, enabling it to effectively engage a diverse range of threats, including ballistic, cruise, and hypersonic missiles.
To meet the increasing demand, Lockheed Martin has already expanded PAC-3 MSE production by over 60 percent in the past two years, successfully delivering 620 missiles in 2025—a 20 percent increase from the previous year. The company recently secured a $9.8 billion contract with the U.S. Army, focused on producing nearly 2,000 missiles, and has partnered with Diehl Defence to bolster supply chain resilience.
Company executives highlighted that further growth in production will require advancements in manufacturing technology, an expanded workforce, and a diversified supplier base. Efforts will also be made to replace or supplement underperforming vendors to ensure production targets are met.
Looking ahead, the Pentagon has indicated plans to extend similar long-term agreements to key suppliers involved in the PAC-3 program. This strategic approach may also be adopted for other high-demand munitions programs, signaling a broader commitment to enhancing the nation’s defense capabilities in an increasingly complex security landscape.
