Lockheed Martin begins production of upgraded F-35 fighter jets for US and allied forces.

On November 22, 2024, the United States Department of Defense awarded Lockheed Martin a $869,947,066 contract to procure long-lead materials, parts, components, and associated support for the production of F-35 stealth fighters under Lot 20. These aircraft, which will feature the Technology Refresh 3 (TR-3) upgrade, are intended for the US Air Force, Navy, and Marine Corps, as well as international customers through the Foreign Military Sales (FMS) program and other partner agreements.
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The Technology Refresh 3 (TR-3) is an upgrade that enhances the F-35's processing power, memory, and avionics for improved operational capabilities. (Picture source: US DoD)

The funding includes $197,529,066 from the Air Force’s fiscal 2025 aircraft procurement budget, $172,718,000 from the Navy’s 2025 procurement budget, $35,400,000 from non-U.S. DoD partners, and $464,300,000 from FMS customers. The funds do not expire at the end of the current fiscal year. The contract is scheduled to be completed by May 2031. F-35 aircraft produced under Lot 20 will include the Technology Refresh 3 (TR-3) upgrade and additional planned modifications under the Block 4 configuration. These upgrades involve enhanced avionics and systems required for modern mission requirements. The TR-3 package includes a new display, updated core processor, and improved memory modules, which are necessary for the processing requirements of future operational capabilities.

On November 21, 2024, Lockheed Martin and the F-35 Joint Program Office (JPO) reached a preliminary "handshake deal" for Lots 18 and 19, covering approximately 300 F-35 aircraft. This agreement is expected to be finalized by the end of 2024. Unlike previous contracts that encompassed three production lots, Lot 20 will be negotiated separately as part of a multiyear production plan.

The extended negotiations for Lots 18 and 19 were influenced by supply chain challenges, inflation, and delays in the Technology Refresh 3 (TR-3) upgrade development. To sustain production and prevent supply chain disruptions, Lockheed Martin allocated $400 million during the third quarter of 2024 and an additional $300 million subsequently. Deliveries were previously halted from mid-2023 to mid-2024 due to issues with TR-3 hardware and software. Production and deliveries resumed in July 2024 following JPO approval.

During the delivery suspension, the JPO withheld $5 million per aircraft from Lockheed Martin, with the company forfeiting $60 million in fees. As of November 2024, Lockheed Martin has been delivering approximately 20 F-35s per month, including newly produced units and stored aircraft. The company expects to deliver between 75 and 110 units in 2024 and aims to produce over 156 units annually starting in 2025.

The F-35 program continues to attract international customers. As of November 2024, the three most recent countries to select the F-35 Lightning II are Greece, the Czech Republic, and Romania. Greece signed an agreement in July 2024 for 20 F-35A aircraft, with deliveries scheduled between 2027 and 2028, and included an option for 20 additional jets. The Czech Republic agreed in January 2024 to purchase 24 F-35A fighters, with deliveries expected to begin in 2031 and operational capability projected by 2035. Romania joined the F-35 Global Alliance in November 2024, securing a contract for 32 F-35A aircraft valued at $6.5 billion, becoming the 20th country to select the aircraft.

In March 2024, the F-35 program achieved Milestone C, marking its official clearance for full-rate production. This milestone enables the negotiation of multiyear production contracts, allowing contractors to procure materials in larger quantities, thereby potentially reducing costs. Lot 20 is anticipated to be the first production lot negotiated under this framework. As of March 2024, over 990 F-35 aircraft have been delivered to U.S. services, cooperative program partners, and foreign military sales customers.

The ongoing implementation of Block 4 and Technology Refresh 3 (TR-3) upgrades continues to influence production timelines. TR-3 enhancements provide the computational power necessary to support modernized Block 4 capabilities, including new sensor suites, additional long-range precision weapons, improved electronic warfare features, more powerful data fusion, and increased cross-platform interoperability. However, challenges in TR-3 development have previously caused delays, with the first TR-3-configured F-35s delivered in July 2024. These upgrades remain a focal point as the program advances, aiming to enhance the aircraft's lethality and interoperability.