Lockheed Martin (LMT) said it has reached a seven-year agreement with the U.S. Department of War to sharply increase production of its PAC-3 missile interceptors, reflecting rising global demand for air defence systems.
The deal will raise annual production capacity to 2,000 units, up from about 600 previously, according to the company. The PAC-3 is a core component of the Patriot missile system, widely used by the United States and its allies.
Demand has accelerated as countries strengthen air defence in response to heightened geopolitical tensions. The Patriot system is among the weapons supplied by Western nations to Ukraine amid Russiaโs invasion, further increasing pressure on manufacturers to scale output.
Lockheed Martin currently supplies the PAC-3 missile to 16 countries, including Sweden, Qatar, Japan and Poland. The company said it delivered 620 Patriot missiles in 2025, marking a steady rise in output. Over the past two years, production has increased by 60%.
The defence contractor will now work with the U.S. government toward an initial contract award tied to the expanded capacity. That award is expected to be finalised through fiscal year 2026 Congressional appropriations, the company said.
The production expansion follows a record-breaking order last year. In September 2025, the Bethesda, Maryland-based firm secured a $9.8 billion defence contract for 1,970 Patriot missiles, the largest single order ever placed for the system.
The scale of the agreement highlights how missile defence has become a priority for governments facing rising security risks. For Lockheed Martin, the long-term deal provides production certainty while reinforcing its position as a key supplier in the global air defence market.
As nations invest heavily in military readiness, the Patriot system remains one of the most sought-after interceptors in service, placing Lockheed Martin at the centre of a rapidly expanding defence supply chain.
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