The United States Army is confronting serious budgetary challenges following plans to drastically expand production of interceptors for its Terminal High Altitude Area Defense (THAAD) anti-ballistic missile system, amid growing questions about the system's effectiveness against modern threats.

Defense contractor Lockheed Martin recently announced a framework agreement to quadruple annual THAAD interceptor production from 96 to 400 missiles. The expansion comes after the system's first high-intensity combat deployment exposed critical vulnerabilities in both capacity and capability.

In June 2025, US Army THAAD batteries covering Israeli airspace expended over 150 interceptors during the 12-day Israeli aggression on Iran. According to the Wall Street Journal, this represented nearly a quarter of all interceptors ever purchased by the Pentagon. Demand proved so overwhelming that officials considered diverting interceptors purchased by Saudi Arabia to Israeli systems.

The financial implications are staggering. With each THAAD interceptor costing approximately $15.5 million, interception efforts during the June 2025 war exceeded $2.35 billion. Annual procurement of 400 interceptors would cost roughly $6.2 billion, straining an already overstretched defense budget competing with other critical programs, including the M1E3 Abrams tank development and enhancements to the lower-tier Patriot air defense system.

Limited effectiveness despite massive expenditure

Despite this massive expenditure and support from US Navy AEGIS systems and Israeli defenses, THAAD's protective capabilities proved limited. US sources confirmed extensive damage to Israeli military and strategic targets, and even President Donald Trump acknowledged days after hostilities ended that "Israel was hit really hard. Those ballistic missiles, boy, they took out a lot of buildings."

The deployment followed Washington's October 2024 decision to station THAAD systems in "Israel" after Iran and Yemen's Ansarullah demonstrated capabilities to strike sensitive military targets across the entity with long-range missiles.

Pentagon officials cite intensifying ballistic missile threats as justification for expanded procurement. However, the system's viability against modern arsenals is increasingly questioned by defense analysts.

THAAD deployments span multiple theaters, from Hawaii (2009) and Guam (2013) to South Korea (2016), ostensibly countering threats from the Democratic People's Republic of Korea and China, whose arsenals dwarf Iran's in size and sophistication.

Hypersonic technology challenges system viability

The emergence of hypersonic glide vehicles poses an existential challenge to THAAD's operational relevance. These weapons, now deployed by China, Russia, DPRK, and Iran, achieve extreme reentry speeds and exceptional maneuverability while striking from unexpected trajectories, rendering interception by systems like THAAD effectively impossible.

DPRK fielded its first intermediate-range ballistic missile with hypersonic glide capability, the Hwasong-16B, in mid-2024, while Russia deployed the Oreshnik system in December 2025.

Iran's limited use of its Fattah hypersonic missile during June engagements, believed to have been developed with DPRK support, caused significant concern among Israeli military leadership, spurring calls for a fundamental revision of the entity's missile defense strategy.

As Washington pursues massive THAAD expansion, the system's prohibitive costs and diminishing effectiveness against evolving threats raise fundamental questions about the sustainability and strategic wisdom of continued investment in conventional missile defense architectures.

Source:Websites