PAC-3 MSE: Lockheed and Diehl sign MoU to expand production

Lockheed Martin and Diehl Defence are working together to improve PAC-3 MSE supply chains, building on several other developments for the missile. This is an important step for Europe, and others underway in the US should help this critical missile meet the needs of the coming decade.

Lockheed Martin and Diehl Defence have announced a partnership that will set out to explore opportunities to expand the supply chain for the PAC-3 MSE missile, as well as research and development activities. The MoU, announced on October 14, comes after Lockheed revealed details of its PAC-3 MSE production, which is set to reach 650 missiles by 2027. Demand for the missiles is growing, and Lockheed is working to expand its supply chain to meet the need. “By deepening our collaboration with industry leaders like Diehl Defence, we can ensure a more resilient and responsive supply chain that supports allied defence,” Jason Reynolds, vice president of IAMD at Lockheed Martin said. 

This is not Europe’s first partnership to support Patriot missile production. Bayern-Chemie, which belongs to MBDA Germany, held a groundbreaking ceremony for a new facility that will produce rocket motors for the PAC-2 GEM-T air defence missiles in late 2024. This development followed a contract awarded to COMLOG GmbH, a joint venture between MBDA Germany and Raytheon, to manufacture and deliver 1,000 Patriot PAC-2 GEM-T to Germany and NATO members. PAC-2 GEM-T was developed to improve Patriot’s ability to intercept tactical ballistic missiles, it carries an improved seeker assembly that can detect targets at 90 degrees of elevation compared to the 20 degrees used by earlier, air defence-focused, variants. This helps it scan a wider area for ballistic missiles and intercept them. 

The PAC-3 MSE is several levels of development on from the PAC-2 GEM-T and designed specifically to intercept ballistic missiles rather than a retrospective modification like the GEM-T. It is designed for “hit-to-kill” interceptions, which just means the missile flies into the ballistic missile, rather than exploding near it. The PAC-3 MSE and ballistic missiles travel at thousands of miles per hour, a 9M723 can reach Mach 3 in its mid-course phase, for example. When they collide, the combined speed creates a huge amount of kinetic energy, which destroys the ballistic missile. Hit-to-kill is preferred over blast fragmentation because it can destroy the warhead and missile completely, and is more likely to do so if it hits. Blast fragmentation damages the missile, and it can still land or make its way through to the defended area. 

So, Lockheed’s partnership with Diehl Defence aims to increase and diversify the global supply chain for the missile. It adds to a May 2025 agreement between Lockheed Martin España S.A. and the Spanish MoD, which will allow the Spanish defence industry to compete for opportunities to produce PAC-3 MSE components. It included agreements with Spanish defense technology firms Sener and Oesía-Tecnobit. “This partnership is expected to increase global supply chain resilience and create new business opportunities,” the press release said.

“Sener will design and develop PAC-3 MSE actuators based on Lockheed Martin specifications and Oesía Tecnobit will produce specialised PAC-3 MSE cables and harnesses,” Lockheed added. That agreement followed Spain’s decision to acquire PAC-3 MSE in 2024.  

In Poland, Lockheed has partnered with Wojskowe Zakłady Elektroniczne (WZE), to produce Attitude Control Section and Attitude Control Motor components for the PAC-3 MSE. The company’s products were tested and approved in September 2025, setting it on the path to join the global PAC-3 supply chain. These components work to refine the missile’s trajectory and bring it onto an intercept path with the threat missile.

This suggests that there is a focus on diversifying the supply chain and providing industrial resilience through off-shoring that can also increase production. Missiles are complex systems requiring thousands of components that have to be manufactured to very high standards. The partnership with Diehl could lead to European production of key components that help meet Europe’s demand as well as the US need. 

PAC-3 MSE, a critical capability

It is hard to point at one defence capability and say “this one is critical, more important than some others.” War and deterrence generally require a balance and mixture of capabilities that are interdependent and work together to protect, defend, and kill. However, the PAC-3 MSE (Missile Segment Enhancement) air defence missile from Lockheed Martin – and the Patriot air defence system – are one example where this case can be made. The reason for this is that Russia believes it could win a war with NATO by hitting critical national infrastructure (CNI) and military installations with long-range weapons. The belief, prior to 2022 at least, was that calibrated doses of damage would shape NATO member state actions and approaches to Article 5. 

Some Russian theorists have even proposed that conventional cruise missile strikes could be used to ease NATO states into accepting a tactical nuclear strike. The delivery mechanisms for Russia’s most advanced capabilities are long-range cruise missiles, primarily the Kh-101 and 3M-14 Kalibr family, the air-launched Kh-47M2 Kinzhal, and the ground-launched 9M723 Iskander quasi-ballistic missile. Of course there is also the problem of the Geran-2 strike drones, now produced in their thousands for attacks against Ukraine. But they are a separate challenge, not one that should be addressed with PAC-3 MSE. The high end threats, those that are most challenging for air defences are the 9M723 and Kh-47M2. Their speed and trajectory have repeatedly overcome Ukraine’s air defences, with interception rates often as low as 5% or 6%, and occasionally they pass through without interception. 

Both missiles are nuclear capable and even when conventionally used, can be devastating. 9M723 is part of Russia’s recce-strike complex, and designed for deliberate and dynamic targeting against CNI, high value targets like air defences, and concentrations of enemy troops. There are some European capabilities that can counter these missiles, primarily the SAMP/T NG, but many more states employ Patriot, which is why the PAC-3 MSE, its development and supply chain, are so important. European states that already use or are expected to use the Patriot in the coming years include: 

• Germany, 17 systems in service or on order representing 136 launchers. 
• Greece with at least four systems in service. 
• The Netherlands, with four systems in service. 
• Poland, with eight systems in service or on order. Poland’s order alone includes 852 PAC-3 MSE missiles.
• Romania, with seven systems and 28 launchers. The country ordered 168 PAC-3 MSE missiles as well as 52 PAC-2 GEM-T missiles. 
• Spain, thought to have six batteries. 
• Sweden, deploys four units with 12 launchers and has approval to procure up to 300 missiles across both PAC-2 and PAC-3. 
• Switzerland has ordered five batteries, 70 GEM-T and 72 PAC-3 MSE missiles. 
• Ukraine, deploys at least seven batteries and additional launchers, which have been provided by Germany, the US, the Netherlands, and Norway, likely reducing the quantities of launchers and missiles available from the above. 

The European Patriot holding suggests that there are hundreds of launchers in Europe alone. Each launcher can hold up to 12 PAC-3 MSE missiles, which indicates that 1,632 would be required to arm each of Germany’s 136 launchers. The need is very clearly huge, and so supporting production is likely to be a key concern for Lockheed.

In potentially related news, Lockheed and General Dynamics provided an update on the progress of their Solid Rocket Motor production facility in Arkansas on October 14. Lockheed produces a range of missiles, including PrSM, Javelin, and GMLRS as well as PAC-3 MSE. But it is possible that the new facility will support rocket motor production for all of them. The new site, which will include 50,000 square feet of production space, is expected to be complete in 2026. 

Separately, the company released a short feature on how it is using artificial intelligence to improve the PAC-3 MSE. “Lockheed Martin has used artificial intelligence tools and techniques in PAC-3 interceptors since the program’s inception. Every PAC-3 ever fielded has featured an embedded AI software component,” the article states. The latest developments are not detailed beyond: 

“By leveraging AI/ML techniques across the kill chain, Lockheed Martin will be able to improve the system’s ability to detect, track and engage targets with unprecedented precision and speed. As a result, PAC-3 MSE will be able to adapt to new threat behavior and tactics in real-time, even while the threat is still in the air.”

This is an interesting statement to make in the wake of Ukraine claiming that 9M723 and Kh-47M2 missiles were manoeuvring a lot more and reducing their ability to intercept them. While the exact cause of that reduced air defence efficacy is not totally clear, Lockheed’s statement suggests that future PAC-3 MSE iterations will be able to adapt to this behaviour. 

Calibre comment: Air defence is expensive

Past articles on Calibre Defence have highlighted the cost of air defence. And this one will do the same – air defence is really expensive. Sweden’s request to purchase 300 missiles had a maximum value of $3.2 billion. It is likely that a single night of missile defence against Russia would consume that many PAC-3 MSE missiles. To say nothing of the other interceptors required to defend against Gerans and theatre ballistic missiles like the Oreshnik. However, the costs of poorly-resourced air defence are likely much greater. If, for example, Russia knew that it could overwhelm European air defences within a week, that would do significant harm to NATO’s ability to deter the Kremlin from further aggressive action. During a war, a failed interception could also prove disastrous. A well-placed Iskander strike against a NATO airbase – many of which do not include hardened aircraft shelters – could immobilise or destroy dozens of the fifth generation aircraft that we would rely on to fight the subsequent war. It is unlikely that those planes would be replaced inside a few years. These, and many other reasons, are why the PAC-3 MSE is so important for the defence of Europe, and why it is worth covering developments like Lockheed’s MoU with Diehl. 

By Sam Cranny-Evans, published on October 15, 2025. The lead image shows a Patriot launcher with PAC-3 missiles in green, and the PAC-3 MSE missiles in tan. Credit: Boevaya mashina – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=122449442.