Anduril and U.S. Navy Invest $6.6 Billion to Ease U.S. Virginia-Class Submarine Production Delays.

Anduril Industries and the U.S. Navy are committing up to $6.6 billion to establish new Virginia-class nuclear-powered attack submarine production capacity at Sparrows Point in Maryland, where Arsenal-2 will manufacture critical components and large assemblies for final integration at existing shipyards. The investment addresses persistent production constraints as the Navy replaces aging Los Angeles-class submarines and prepares for future submarine commitments under AUKUS.

Anduril Industries and the U.S. Navy are investing up to $6.6 billion in Arsenal-2, a new Maryland industrial complex designed to support production of Virginia-class nuclear-powered attack submarines. The Sparrows Point facility will manufacture critical components and large assemblies, then transfer them to shipyards responsible for final construction, adding capacity as several Virginia-class boats face delays measured in years. The expansion comes as the Navy must renew its attack submarine fleet while preparing for future AUKUS requirements.

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Anduril’s Arsenal-2 investment is intended to expand U.S. industrial capacity for Virginia-class submarines such as USS Mississippi SSN 782 pictured here during its pre-commissioning period. (Picture source: Anduril/US Navy)

The issue therefore extends well beyond the construction of a new factory. The United States generally funds two Virginia-class submarines per year, but actual industrial output has remained well below that objective, at roughly 1.1 to 1.2 boats annually in recent years. That gap has contributed to a growing backlog of funded submarines awaiting construction or delivery. Over the longer term, the Navy will need to move beyond two boats per year, with requirements assessed at around 2.33 Virginia-class submarines annually, to sustain its own force structure while compensating for submarines expected to be transferred to Australia.

According to Anduril in a statement published on October 6, 2026, the company plans to invest $3.7 billion in private capital in Arsenal-2, while a U.S. Navy contract could provide up to another $2.9 billion depending on production results. The complex will cover more than two million square feet across a 187-acre site and is expected to create about 3,100 direct jobs. Initial operations are scheduled to begin in 2030, followed by a progressive increase in production.

Arsenal-2 will not assemble complete Virginia-class submarines. Anduril will instead manufacture complex components and large assemblies that will later be delivered to General Dynamics Electric Boat and HII Newport News Shipbuilding, the two principal U.S. nuclear submarine builders. The objective is to remove part of the industrial burden currently carried by those yards and their suppliers. Among the first components expected to be produced are torpedo tubes, which have been identified as one of the items capable of slowing progress on submarines already under construction. Over time, Anduril intends to expand production to larger modules and potentially major hull sections.

The Maryland site is expected to add about nine million industrial labor hours per year to the Virginia-class program, equivalent to roughly 15 percent of additional production capacity according to figures presented around the project. Before Arsenal-2 opens, Anduril also plans to establish a 160,000-square-foot facility in Orange County, California. That site will be used to qualify manufacturing processes, train workers, and produce test hardware as well as different maritime components. The experience gained there is then expected to be transferred to Maryland as Arsenal-2 scales.

Virginia-class submarines form the future backbone of the U.S. attack submarine fleet. Standard variants displace about 7,800 tons submerged and can exceed 25 knots. Since Block III, the 12 individual vertical launch tubes fitted to earlier boats have been replaced by two large-diameter Virginia Payload Tubes, each able to carry six Tomahawk cruise missiles. Block V submarines equipped with the Virginia Payload Module add four additional tubes capable of accommodating up to 28 more weapons. The class also uses four torpedo tubes for Mk 48 Advanced Capability heavyweight torpedoes.

At the tactical level, these submarines combine anti-submarine warfare, anti-surface warfare, intelligence collection, special operations support and long-range land attack within the same deployment. Nuclear propulsion allows them to sustain extended patrols without the battery endurance limitations associated with conventional submarines. Virginia-class boats also use a fly-by-wire ship control system designed to improve handling in shallow waters, while their reconfigurable torpedo room can accommodate special operations teams and associated equipment. A large lockout chamber allows divers to be deployed covertly, and the class uses an open-architecture approach intended to facilitate the progressive integration of new sensors and payloads over its service life. This versatility makes every industrial delay particularly sensitive, since a submarine delivered several years late directly reduces the number of boats available for forward deployments, maintenance rotations and persistent presence across multiple theaters.

Arsenal-2 therefore responds to a problem that is becoming as operational as it is industrial. The U.S. attack submarine fleet is expected to face pressure during the next decade as remaining Los Angeles-class boats retire faster than new Virginia-class submarines can enter service. At the same time, Washington must maintain a strong undersea presence in the Indo-Pacific as China expands its naval capabilities, preserve credible submarine forces in the North Atlantic in relation to Russia, and prepare for the transfer of three to five Virginia-class submarines to Australia. By bringing another major industrial actor into the submarine supply chain, the United States is attempting to prevent existing production constraints from developing into a prolonged operational shortfall at a time when demand for nuclear-powered attack submarines continues to rise.

Written By Erwan Halna du Fretay - Defense Analyst, Army Recognition Group
Erwan Halna du Fretay holds a Master’s degree in International Relations and has experience studying conflicts and global arms transfers. His research interests include security and strategic studies, particularly the dynamics of the defense industry, the evolution of military technologies, and the strategic transformation of armed forces.

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