The U.S. Department of Defense has announced a contract modification worth over $2 billion with Lockheed Martin for the production of interceptors for the Terminal High Altitude Area Defense (THAAD) system, as part of efforts to replenish the U.S. Armed Forces’ stockpiles following the recent operational deployment of the system in Israel.
The award, granted by the Missile Defense Agency, raises the total value of the existing contract from $8.353 billion to $10.416 billion. The associated work will be carried out at several Lockheed Martin facilities located in Dallas (Texas), Sunnyvale (California), Troy (Alabama), and Camden (Arkansas), with an estimated completion date of December 1, 2029. At the time of the announcement, more than $284 million from the fiscal years 2024 and 2025 procurement budgets had already been committed.
The ramp-up in THAAD interceptor production comes amid growing tensions in the Middle East, particularly after the so-called “12-Day War,” and following the operational use of the system by U.S. forces deployed in Israel. In January 2025, a THAAD battery intercepted a medium-range ballistic missile (MRBM) for the first time in combat. The missile, launched from Yemen by Houthi rebels aligned with Iran, was reportedly targeting Ben Gurion Airport and accompanied other drone attacks on Tel Aviv.
This marked the first combat use of the THAAD system under direct control of the U.S. Army since its introduction in 2008. Previously, only a battery operated by the United Arab Emirates had used the system in an actual combat scenario.
The THAAD battery and a contingent of approximately 100 troops were deployed to Israel in October 2024, amid concerns over a potential Iranian attack during a period of heightened regional hostilities. Although the exact configuration of the deployed system has not been officially disclosed, specialized sources suggest it may include up to nine launchers—each capable of carrying eight interceptors—along with a long-range AN/TPY-2 X-band radar and its corresponding command and control vehicle.
This is not the first THAAD deployment to Israel. The U.S. has maintained AN/TPY-2 radar systems in the country since 2012, particularly at Site 512 in the Negev Desert. Later, in 2017, the American military presence expanded with the occupation of Site 883 at Bislach Air Base. In 2019, the first deployment of a full THAAD battery took place during joint exercises focused on demonstrating rapid response capabilities and reinforcing bilateral defense cooperation.
The decision to boost interceptor production responds to the need to replenish strategic reserves after live ammunition was used, while also maintaining commitments across various operational theaters. According to defense authorities, the timely replenishment of these systems is key to sustaining deterrence and defense capabilities against ballistic missile threats in multiple regions worldwide.
*Images for illustrative purposes only
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