Anduril and Navy Commit $6.6B to New Submarine Industrial Yard as Virginia Production Lags Target
October 7, 2026
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Anduril Industries will build a new 187-acre, more than 2-million-square-foot submarine manufacturing complex at Sparrows Point, Maryland, backed by $3.7 billion of Anduril private capital and an up-to-$2.9 billion U.S. Navy production contract, creating a combined $6.6 billion commitment to expand the Virginia-class submarine industrial base. Called Arsenal-2, the facility is expected to begin initial operations in 2030 and eventually manufacture large submarine components and assemblies for delivery to General Dynamics Electric Boat and HII Newport News Shipbuilding rather than assemble complete nuclear submarines itself. Anduril plans to start with constrained components such as torpedo tubes and progressively move toward larger modules, potentially including complete bow and stern sections. The facility is expected to add about 9 million production labor hours per year, which administration officials characterized as roughly a 15% increase in Virginia-class industrial capacity.
Arsenal-2 · Sparrows Point · Maryland
This Is Not Another Expansion Inside Electric Boat or Newport News
The Navy is adding an entirely new industrial node to the Virginia-class production system. Anduril will manufacture components and large submarine assemblies in Maryland, then ship that work to the two established nuclear-submarine prime yards for final assembly.
Anduril Capital
$3.7B
Private capital committed to land, buildings, production equipment,
manufacturing systems and development of Arsenal-2.
+
U.S. Navy Contract
Up to $2.9B
Payments are tied to demonstrated production outcomes.
This is a production contract, not simply federal reimbursement
of Anduril's construction cost.
Combined Industrial Commitment
$6.6 Billion
Anduril describes the private investment and Navy procurement commitment
together as a $6.6-billion expansion of America's submarine industrial base.
Industrial Site
187 Acres
Purpose-built footprint inside the Sparrows Point complex at Tradepoint Atlantic.
Manufacturing Space
2M+ sq ft
Roughly 40 football fields of high-precision production space.
Waterfront
1,200-ft Dock
Existing graving dock plus maritime, rail and road access for moving very large assemblies.
Initial Operation
2030
Site preparation begins first, with production ramping progressively after startup.
The Planned Manufacturing Climb
1
Torpedo Tubes
Anduril is already developing prototypes in California.
Navy officials describe these components as a current gating item
for submarines already under construction.
2
Complex Components
Additional SUBSAFE-qualified parts and high-precision assemblies
would move into serial production.
3
Large Modules
Arsenal-2 is designed to fabricate and outfit much larger Virginia-class assemblies
before shipment to the prime yards.
4
Bow / Stern Sections
Anduril describes complete submarine sections as an aspirational longer-term objective.
It does not plan to build complete Virginia-class submarines.
Important distinction:
Arsenal-2 is being called a shipyard, but it is not becoming a third final-assembly
yard for Virginia-class submarines. Electric Boat and Newport News remain the prime
builders. Arsenal-2 is designed to shift substantial component and module work away
from those constrained facilities so more construction can happen in parallel.
Virginia-Class Production Constraint
Arsenal-2 Is Being Built Into a Production System Already Running Behind
The Navy's challenge is not procuring two Virginia-class submarines in a budget year. It is physically completing them at that pace while simultaneously increasing Columbia-class ballistic-missile submarine construction.
Current Virginia Delivery Rate
~1.3 / Year
Current industry delivery performance remains well below the Navy's
long-standing production requirement.
→
Required Virginia Rate
2 / Year
The Navy now expects the industrial base to reach roughly this level
around 2032 under current expansion plans.
Arsenal-2 Added Capacity
9M Hours / Year
Administration officials say full-scale Arsenal-2 production would
add roughly 15% to Virginia-class industrial production capacity.
Current Program
Virginia Class
Arsenal-2 is specifically being established to produce components
and large assemblies for attack submarines.
Prime Builders
EB + Newport News
Final submarine assembly remains with General Dynamics Electric Boat
and HII Newport News Shipbuilding.
Parallel Pressure
Columbia Class
The same industrial ecosystem must simultaneously deliver one
Columbia-class ballistic-missile submarine annually.
Additional Demand
AUKUS
The United States also plans to transfer Virginia-class submarines
to Australia during the 2030s, adding pressure to the production base.
Arsenal-2 production logic
← →
| Constraint | Current Problem | Arsenal-2 Response | Timing | What It Could Free Up | What It Does Not Solve Automatically |
|---|---|---|---|---|---|
| Torpedo Tubes Immediate gating component | Administration officials say torpedo-tube availability is currently holding up progress on some Virginia-class submarines already under construction. | Anduril is establishing a second production source and beginning prototype work before the Maryland yard opens. | California production qualification first; Arsenal-2 initial operations in 2030. | Prime-yard labor and floor space currently consumed by delayed or constrained components. | Other supplier shortages, nuclear-qualified manufacturing, workforce shortages and schedule problems elsewhere in the submarine enterprise. |
| Skilled Labor Welders, pipefitters, electricians | GAO has repeatedly identified shortages of experienced workers as a cause of submarine production delays. | 3,100 direct jobs at Arsenal-2 plus an earlier workforce pipeline through Anduril's California component facility. | Hiring begins before full Maryland production; Anduril targets more than 3,100 jobs by 2034. | More industrial labor outside Electric Boat and Newport News. | National competition for nuclear-qualified welders, engineers, inspectors and skilled trades. |
| Large Assemblies Distributed construction | The two prime shipyards face finite physical space and labor capacity while handling both Virginia and Columbia programs. | Fabricate and outfit large sections in Baltimore before shipment to the prime yards. | Progressive expansion after Arsenal-2 begins operating. | Allows more submarine construction work to proceed in parallel instead of occupying prime-yard resources. | Final nuclear submarine integration, testing and delivery remain highly specialized operations at the prime yards. |
| Production Control ArsenalOS | Complex submarine production requires thousands of controlled fabrication, inspection and documentation steps. | Digital work instructions, material tracking, embedded inspection controls, automation and real-time production visibility. | Methods tested in California before broader implementation in Maryland. | Potential reductions in staging delays, training time and disconnected production records. | Digital systems cannot remove SUBSAFE certification standards or substitute for skilled trade knowledge and nuclear-quality controls. |
| Fleet Demand Navy + AUKUS | U.S. requirements already call for two Virginia-class boats annually, while planned transfers to Australia create additional replacement pressure. | Creates a substantial new source of components and production hours outside the existing two-yard system. | Maryland production starts around the same decade in which AUKUS Virginia transfers are expected to begin. | Adds industrial depth before those additional obligations peak. | Overall AUKUS feasibility still depends on the entire U.S. submarine industrial base reaching and sustaining higher construction rates. |
Arsenal-2 production logic
← →
Production-rate context:
procurement rate and physical construction rate are not the same measure.
The Navy has often purchased two Virginia-class submarines in a year even while the
industrial base completed them at a substantially lower annual rate.
Ship Universe Submarine Capacity Tool
Arsenal-2 Industrial Capacity Analyzer
Test how a new production node changes industrial capacity under simplified assumptions. The model treats Anduril's announced 9 million annual labor hours as additive manufacturing capacity rather than directly assuming it produces a specific number of submarines.
million hrs
%
subs/year
subs/year
workers
hrs/year
Scenario assumption used only to compare the announced production-hours
figure with a simple workforce-hour equivalent.
Implied Existing Capacity Base
60M hrs
9M hours divided by the entered 15% incremental capacity assumption
Post-Arsenal Capacity Base
69M hrs
existing modeled capacity plus Arsenal-2 annual hours
Current Virginia Rate Gap
0.7
difference between current delivery rate and two-per-year target
Simple 15% Rate Equivalent
1.50
current rate increased by entered capacity percentage
Workforce-Hour Equivalent
4,500
annual production hours divided by entered employee-hour assumption
Direct Workforce Hours
6.2M
3,100 workers × entered annual employee hours
Simple Capacity Comparison
This does not assume labor hours convert directly into submarines.
It shows the scale of the announced industrial addition relative
to the existing system implied by the 15% figure.
Capacity Interpretation
Major Addition, Not Full Fix
A 15% industrial capacity increase is large for a single new supplier,
but a simple proportional calculation still does not close the current
Virginia-class delivery gap by itself.
Arsenal Hours
9M
Capacity Gain
15%
Direct Jobs
3,100
Target Rate
2/year
Scenario model only:
submarine production does not scale linearly with labor hours.
Nuclear-quality materials, supplier throughput, design sequence, dry-dock capacity,
module availability, inspection, rework and final integration can all become independent
bottlenecks. The Navy's 15% figure should therefore be understood as an industrial-capacity
estimate, not a promise that Virginia-class deliveries will rise 15%.
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