U.S. DoD Increases SM-3 Naval Missiles Investment to Strengthen U.S. and Allied Maritime Defense.

On May 13, 2025, the U.S. Department of Defense significantly increased its investment in missile defense capabilities with a $2.134 billion modification to an existing contract awarded to the American defense company Raytheon. This latest modification raises the total contract value from $1.198 billion to a substantial $3.332 billion, emphasizing the Pentagon’s strategic commitment to sustaining and enhancing the Standard Missile-3 (SM-3) program, a highly advanced naval-based interceptor missile system, designed for ballistic missile defense. The program supports both U.S. forces and allied nations through the Foreign Military Sales (FMS) initiative.
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The U.S. Navy Arleigh Burke-class guided-missile destroyer USS Paul Ignatius (DDG 117) successfully launched its second Standard Missile-3 (SM-3) interceptor to engage a ballistic missile target during the At-Sea Demo/Formidable Shield exercise. (Picture source: U.S. DoD)

The newly expanded contract includes a broad range of responsibilities for Raytheon, covering the management, material support, and engineering services necessary to maintain and improve all current variants of the SM-3 missile. These services are critical to ensuring the long-term readiness, reliability, and modernization of the SM-3 inventory, which plays a pivotal role in regional and global missile defense architectures. The support will benefit not only the United States but also key allied nations such as Japan and South Korea, underlining a growing trend of Indo-Pacific defense collaboration in response to escalating regional missile threats.

The Standard Missile-3 is a cornerstone of the United States’ layered missile defense strategy and a vital component of the Aegis Ballistic Missile Defense (BMD) System. Originally developed by Raytheon, the SM-3 family is specifically designed for exo-atmospheric interception of short- to intermediate-range ballistic missiles, targeting threats during the midcourse phase of their trajectory, outside the Earth’s atmosphere.

Primarily a naval-based missile, the SM-3 is launched from Aegis-equipped surface warships, where the Aegis Combat System guides it for fire control and engagement coordination. The Aegis system uses powerful SPY-1 or SPY-6 radars to detect and track incoming threats, enabling high-speed interception. In addition to its naval deployment, the SM-3 has also been adapted for land-based operations under the Aegis Ashore program, with fixed installations in Romania and a forthcoming site in Poland, extending its reach and enhancing NATO’s missile defense posture.

The SM-3 uses hit-to-kill technology, destroying incoming warheads by direct impact at hypersonic speeds rather than using explosive warheads. This reduces collateral damage and increases kill accuracy, making it highly suitable for protecting civilian populations and critical infrastructure.

The missile has undergone several evolutionary upgrades to improve its capabilities in response to emerging threats. The SM-3 Block IA was the initial operational model, offering improved sensors and reliability for early deployment. The SM-3 Block IB features a two-color infrared seeker and a Throttleable Divert and Attitude Control System (TDACS) for enhanced maneuverability. The most advanced variant, the SM-3 Block IIA, was developed in cooperation with Japan’s Mitsubishi Heavy Industries. It features a 21 in (53 cm) diameter booster and kill vehicle for significantly extended range and engagement capabilities.

The SM-3 Block IIA offers an estimated range of over 2,500 km (1,550 mi), depending on engagement conditions, and can intercept ballistic missiles with ranges up to 3,000 km (1,860 mi), including certain types of intercontinental ballistic missiles (ICBMs) under specific scenarios. This long reach allows the SM-3 to defend not only localized areas but also entire regions from sea or land-based platforms.

In terms of combat capabilities, the SM-3 excels in multiple areas. It can travel at speeds exceeding Mach 10 (over 12,000 km/h or 7,500 mph), allowing for rapid interception of fast-moving targets in space. Its extended engagement zones, especially in the Block IIA version, enable protection of wide geographic areas from a single launch platform. Advanced sensor systems, including dual-mode seekers, ensure precise targeting and discrimination of real warheads from decoys. The missile's multi-platform flexibility and integration into joint and allied missile defense architectures further enhance its role in cooperative regional security.

A notable deployment focus is the Defense of Guam, where SM-3-equipped systems will help protect U.S. assets in the Pacific. Although the Pentagon reduced its planned number of missile defense sites on the island from 22 to 16 in 2024 due to environmental concerns, the region remains a strategic hub. SM-3 interceptors, both sea-based and potentially from land-based assets, will continue to play a key role in safeguarding this vital outpost.

The expanded contract also signals a continued commitment to allied missile defense integration, particularly with Japan and South Korea. These partnerships are critical in deterring regional adversaries, including North Korea and others developing advanced ballistic missile capabilities.

This substantial contract augmentation for Raytheon is more than a financial investment. It reflects the U.S. Department of Defense’s strategic resolve to advance missile defense readiness. With the SM-3’s unmatched speed, precision, and evolving combat capabilities, the U.S. and its allies are reinforcing a robust, flexible shield against the growing threats of the 21st-century missile battlefield.