From 96 to 400 THAAD interceptors per year: what the Lockheed-Pentagon agreement reveals about stockpiling, costs, and buyers.
In summary
The Pentagon and Lockheed Martin have signed a framework agreement to increase production of THAAD interceptors from 96 to around 400 units per year over seven years. Behind the announcement lies a concrete problem: missile defense consumes missiles quickly, especially when deployments are increasing in the Middle East and stocks must remain credible in the face of salvos. THAAD is not a conventional “anti-aircraft battery.” It is a mobile system designed to strike a ballistic missile in its terminal phase, including at high altitude, by hit-to-kill collision, guided by AN/TPY-2 radar. The increase in production rate is aimed at both quantity and industrial resilience. Budget figures show a high cost per missile and per unit, making multi-year planning crucial. U.S. purchases are in addition to export sales via Foreign Military Sales, particularly in the Gulf.
The announcement that says one thing above all else: stocks are no longer keeping up
Lockheed Martin has announced an industrial ramp-up mechanism, backed by the federal government, to significantly increase the production rate of THAAD interceptors. The milestone is massive: to increase from 96 to approximately 400 missiles per year over a period of seven years, with the first contract expected in the 2026 fiscal year.
This trajectory did not come out of nowhere. The logic is simple. Recent conflicts have shown that ground-to-air or anti-missile defense is not something you “own”; it is something you consume. And it is consumed quickly as soon as the adversary fires salvos, multiplies the number of vectors, or forces the defense to engage several interceptors on a single threat to increase the probability of destruction.
The implicit message is more interesting than the financial communication. Washington believes that it must be able to sustain a sustained pace of engagement across multiple theaters while continuing to arm its allies. If the chain does not follow, the deterrence posture deteriorates. And at that point, technology can no longer compensate for the lack of volume.
THAAD, a missile defense system designed to strike high and far
THAAD stands for Terminal High Altitude Area Defense. Its mission is specific: to intercept ballistic missiles at the end of their trajectory, as they descend toward their target. This “terminal” positioning distinguishes it from other components of the shield, which can target earlier in flight or lower in the atmosphere.
THAAD is often described as an intermediate layer. It covers a larger area than a Patriot and complements other systems such as Aegis BMD at sea. In short, it serves to protect a critical perimeter (base, city, strategic installation) against short- to medium-range ballistic threats, and certain intermediate-range threats in limited cases.
The system is mobile. This is key to its operational credibility: it can be deployed, moved, and dispersed. This avoids fixing the defense to a single site, which would make it predictable.
Interception mechanics: “hit-to-kill” or nothing
THAAD uses a hit-to-kill logic. There is no explosive charge designed to blow up the target. The interceptor destroys the re-entry vehicle through the kinetic energy of the impact. This approach imposes two requirements.
The first requirement is accuracy. The system must calculate an interception solution in real time, with a tiny margin of error. The second requirement is discrimination. It must be able to distinguish what is actually the threatening warhead from debris, decoys, or stage separations, depending on the scenario.
Technically, the interceptor follows a trajectory guided by the fire control system, then its seeker and terminal maneuvering capabilities ensure final alignment. The operational benefit is clear: striking the missile before impact also reduces the risks associated with unconventional warheads, as interception can take place at high altitude.
The composition of a unit: trucks, missiles, and 90 soldiers
Public figures provide an understanding of the actual scale of a “THAAD deployment.” According to U.S. reference documents, a THAAD battery typically consists of 6 truck-mounted launchers, 48 interceptors (8 per launcher), a radar, and a fire control and communications element. The announced strength is around 90 soldiers per battery.
This data is important because it highlights a reality: the interceptor is only part of the cost. The radar, C2, support resources, maintenance, training, alerting, and personnel rotation make the difference between a system “on paper” and an available capability.
On a US scale, the US Army has eight THAAD batteries. Some are based in Texas, one is in South Korea, and another is in Guam. This distribution illustrates the priority given to the Indo-Pacific, while maintaining a capacity for projection to other regions.
The AN/TPY-2 radar, the heart that sees far
The AN/TPY-2 radar is an X-band radar designed to detect, track, and help discriminate ballistic threats. Its role is twofold.
It provides the firing track for interception. It can also contribute to early warning and air situation awareness, depending on the mode and integration. In concrete terms, the more stable and “clean” the track, the more robust the firing solution, and the less likely it is that interceptors will be wasted on poorly assessed engagements.
This is also why THAAD is often deployed as a complete system. The missile without the radar is useless. The radar without the firing chain is just a sensor.
Why quadruple production: the war of volumes, not press releases
The increase in production rate is driven by three factors.
The first is operational activity. THAAD batteries have been deployed on several occasions, including to reinforce the protection of US or allied forces. The simple act of deployment increases logistical consumption, training requirements, and the need to replenish stocks.
The second is the threat. The proliferation of ballistic missiles and improvements in their accuracy require denser defenses. Adversaries are banking on saturation. Defense must therefore have “depth of stock,” meaning enough missiles available to last over time.
The third is exports. Sales to Gulf partners and the prospect of new buyers add industrial pressure. The United States does not want to choose between “restocking the army” and “honoring its allies.” It wants to do both.
In this context, the increase to 400 missiles per year is not a luxury. It is a catch-up, spread out over time, with one goal: to make the capacity sustainable.
The costs: an expensive interceptor, and an even more expensive battery
The most sensitive issue is the price. A THAAD interceptor costs several million dollars. Public estimates cited in reference documents are around $12.7 million per missile in some studies, which already gives an idea of the budgetary scale when we are talking about hundreds of units.
And we need to look even higher. A “per battery” cost approach can include missiles, launchers, radar, C2, support vehicles, training, parts, and commissioning. All-inclusive estimates can easily exceed $1 billion. An AEI study proposes, on an incremental basis, approximately $2.73 billion to acquire a battery with a large batch of interceptors, and approximately $32.5 million per year for operation and maintenance.
Let’s be honest: at these price levels, the only way to be consistent is through multi-year planning. Without visibility over several fiscal years, manufacturers will not invest, subcontractors will not increase production, and unit costs will not decrease.
Who is buying and why: the United States first, allies second
On the American side, THAAD falls under the Missile Defense Agency for development and certain aspects of support, with the U.S. Army responsible for operations. Priorities follow the geography of perceived threats: Indo-Pacific and Middle East.
On the export side, the main focus is the Gulf. The best-known example remains Saudi Arabia, with a potential sale announced at $15 billion including 44 launchers and 360 missiles, plus radars and command elements. The United Arab Emirates is also among the customers, with contracts and replenishments, including US approval for 96 interceptors and a support package worth several billion dollars.
The purchasing logic is consistent: states in the region are seeking credible capabilities against ballistic missiles and regional threats. THAAD provides them with a high-altitude layer that complements Patriot and other systems.
There are also political signals of interest from countries such as Qatar, although in these cases it is always necessary to distinguish between announcements, intentions, and executed contracts.
Industrial reasons: opening up the bottleneck
Mass-producing an interceptor is not just a matter of assembling a “rocket.” It requires securing high-stress components, propulsion capabilities, sensors, hardened electronics, and a testing chain.
The advantage of a seven-year framework is that it allows for heavy investment: tools, production lines, partial automation, recruitment and training, and above all, securing subcontractors. Without this, production will plateau, even if the government signs orders.
The agreement also refers to a shared performance approach: if the manufacturer exceeds its targets, part of the value can be reinvested to further accelerate capacity growth. This is a way of limiting the war of amendments and shifting the debate to a concrete issue: delivering more, faster, with fewer uncertainties.
The uncomfortable question: is 400 per year enough?
Even with 400 interceptors per year, the reality remains brutal: missile defense is an endurance race. If a conflict requires sustained engagement, consumption can quickly exceed forecasts, especially if the adversary forces multiple shots per threat.
The Pentagon therefore seems to be looking for something more than just an increase in production. It is looking for predictability, scalability, and an industrial base that can withstand stress. This is exactly what this framework agreement reveals.
The real test will not be the announcement. It will be the execution: deliveries, quality, deadlines, and the ability not to cannibalize U.S. needs for the benefit of export contracts, or vice versa. In a stockpile war, credibility is measured by logistics, not slogans.
Sources
Reuters, “Lockheed Martin forecasts upbeat 2026 profit, revenue amid rising geopolitical tensions,” January 29, 2026.
Lockheed Martin, press release, “Lockheed Martin and U.S. Department of Defense sign framework agreement to quadruple THAAD interceptor production capacity,” January 29, 2026.
Breaking Defense, article on the DoD–Lockheed framework agreement to increase THAAD interceptor production, January 2026.
Congressional Research Service (CRS), fact sheet “THAAD (Terminal High Altitude Area Defense)” / background note on missile defense and related programs, recent edition.
U.S. Department of Defense, Defense Security Cooperation Agency (DSCA), notification of sale to Saudi Arabia concerning THAAD (44 launchers, missiles, radars, and support), reference 17-28, official document.
Federal Register, publication on arms sales notifications and related procedures (references related to THAAD and FMS sales), relevant edition.
Reuters, dispatch on U.S. approval of a potential THAAD-related sale to the United Arab Emirates (missiles and support), August 2, 2022.
Lockheed Martin, press release, “Lockheed Martin receives $1.96 billion THAAD production contract for the United Arab Emirates,” December 30, 2011.
American Enterprise Institute (AEI), note/report “Estimating the Cost of Golden Dome” (missile defense system cost estimates and orders of magnitude), published 2025.
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