Raytheon secures $258M SM-2 development contract from US

August 18, 2025, by Fatima Bahtić

Raytheon has received a $258 million contract for the engineering, manufacturing, and development of SM-2 Block IIICU All Up Rounds from the US Department of Defense.

This is a new contract for the follow-on integration and test phase of a development program the company won in April 2024. The majority of the work will be performed in Tucson, Arizona, and is expected to be completed by September 2031.

Raytheon pens $344 million deal for missile development program

Equipment & technology

The updated variants will share a newly designed guidance section, target detection device, independent flight termination system and electronics unit. This commonality will allow Raytheon to manufacture both missiles on a common production line.

The first users of these updated missiles will be the U.S., Australia, Canada, Japan, and Korea.

“This contract signals the increased demand given the critical role these interceptors are playing for the U.S. and our allies,” said Barbara Borgonovi, president of Naval Power at Raytheon.

“The SM-2 Block IIICU variant incorporates several upgrades and will provide the U.S. Navy with a more capable and versatile missile for modern naval defense operations.”

The SM-2 is a key component of naval layered defense, designed to counter high-speed missiles and aircraft. Compatible with the MK-41 and MK-57 vertical launch systems, it remains the primary anti-air weapon for US Navy Aegis destroyers and cruisers.

Over 12,000 have been delivered worldwide, with operators including the US, Australia, Canada, Germany, Japan, Korea, the Netherlands, Spain, and Taiwan. Chile and Denmark are joining as new customers.

In early 2024, the US Navy used SM-2 missiles in the Red Sea to intercept Houthi missile and drone attacks on commercial shipping.