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Capital · Submarine industrial base

Anduril's next industrial bet is a submarine shipyard

Anduril is backing a planned Maryland yard with $3.7 billion in private capital. It says its Navy contract, worth up to $2.9 billion, ties payments to demonstrated production outcomes.

· Updated

Anduril's route into Virginia-class submarine construction runs through the two companies already building the boats, General Dynamics Electric Boat and Huntington Ingalls Industries' Newport News Shipbuilding. Its planned shipyard, Arsenal-2, will build "complex components and large scale assemblies" of the submarine and deliver them to both for final assembly. The yard will go up at Tradepoint Atlantic in Baltimore County, Maryland.1

Arsenal-2 will build complex components and large scale assemblies

Backed by a $3.7 billion private capital investment by Anduril Industries

Arsenal-2Baltimore County, Maryland
complex components and large scale assembliesplanned
Electric Boatfinal assembly
Newport News Shipbuildingfinal assembly

Initial operations are expected to come online in 2030

Source: Anduril

Sources
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Anduril's $6.6 billion headline figure combines two kinds of money. One is $3.7 billion of private capital that Anduril is putting behind the yard. The other is a Navy contract that Anduril says is worth up to $2.9 billion, with payments tied "directly to demonstrated production outcomes." Anduril says that structure leaves the company, "not the taxpayer," with "the majority of the execution risk."1

Permitting and site preparation begin immediately, with construction to start once the necessary approvals are in place. Initial operations are expected in 2030. The submarine work also has a California address: a new 160,000-square-foot facility in Orange County will manufacture Virginia-class components and support prototyping and production of test assets and maritime components, including torpedo tubes.1

Anduril says adding another source of this work will allow more submarine construction to happen in parallel across the industrial base. It expects production to scale progressively after initial operations as it builds the workforce, supplier base, infrastructure and manufacturing throughput that submarine production requires. Once initial operations begin, expected in 2030, components and assemblies arriving at Electric Boat and Newport News will be the test of that claim.1

Clarification, October 7, 2026: The headline changed from “Anduril backs Arsenal-2, a Virginia-class component shipyard, with $3.7 billion of private capital” to “Anduril's next industrial bet is a submarine shipyard”. The summary now reads: “Anduril is backing a planned Maryland yard with $3.7 billion in private capital. It says its Navy contract, worth up to $2.9 billion, ties payments to demonstrated production outcomes.” Revision notice clarified October 11, 2026.

Sources (1)
  1. Anduril: Anduril, U.S. Navy Invest $6.6 Billion to Expand America's Submarine Industrial Base (Oct. 6, 2026) www.anduril.com
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Contracts · Submarines

Navy asks which shipyards could be prime builders for its SSN(X) attack submarine

The market survey also aims to identify future capital expenditure requirements for the planned Virginia-class successor. It commits the Navy to no solicitation or contract.

The Navy is looking for domestic shipyards interested in and capable of serving as "a prime construction yard(s)" for SSN(X), its planned successor to the Virginia-class attack submarine.2–3 The SSN(X) program office, PMS 351, issued the sources-sought notice with the Navy's directors of submarine programs and of design and construction, and Naval Sea Systems Command's Team Submarine office posted it Friday.1, 3 It is market research meant to "baseline current domestic industrial capabilities, identify future capital expenditure requirements, and inform acquisition strategies."3

The SSN(X) program office PMS 351 issued a sources sought notice to identify domestic shipyards interested and capable of serving as prime construction yard(s)

SSN(X) is the Navy's envisaged successor to the Virginia-class design

U.S. Navy submarines are built byElectric Boat and Newport News Shipbuildingactual

the only two U.S. shipyards capable of building nuclear-powered ships

All responsible sourcesmay submit a capability statementrequested

will be reviewed by the agency if received by the closing date of this notice

Responses are dueOct. 15, 2026requested

no later than 1700 Eastern Daylight Time

market research to baseline domestic industrial capabilities, identify future capital expenditure requirements and inform SSN(X) acquisition strategies

The notice is not a commitment to solicit offers or award contracts

Sources: NAVSEA Team Submarine, SSN(X) sources sought notice N00135-27-SSNX, SAM.gov, Oct. 9, 2026; Congressional Research Service, IF11826. As of Oct. 11, 2026.

Sources
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Today only two U.S. shipyards can build nuclear-powered ships: General Dynamics Electric Boat and HII's Newport News Shipbuilding. They build each Virginia-class boat jointly. Earlier submarines were each built entirely in one yard, and the Congressional Research Service lists which approach SSN(X) should follow among the program's issues for Congress.2 The notice's "yard(s)" leaves the number of prime yards open.3

The bar is infrastructure for "large-scale nuclear submarine construction." Prime yards must be capable of complete hull fabrication, modular outfitting, reactor compartment installation and post-delivery testing, with graving docks or floating drydocks and gantry cranes that can lift submarine modules. Any responsible source may respond, but incomplete questionnaires will not be reviewed. The program office wants detail on each candidate's capacity, drydock availability, tooling and design workforce to determine its readiness for "a long-duration capital combatant construction program."3

The Navy is asking about future capital spending for a boat whose envisaged first procurement was deferred to FY2040 in the Navy's FY2025 budget submission.2–3 Responses are due Thursday, Oct. 15, at 5 p.m. Eastern, through a DoD SAFE secure link vendors must request before the notice closes. The Navy may follow up with vendors it judges capable.3

Sources (3)
  1. SAM.gov federal hierarchy record, organization 500204001 (Team Submarine) sam.gov
  2. [Congressional Research Service: Navy Next-Generation Attack Submarine (SSN[X]) Program: Background and Issues for Congress]( www.congress.gov
  3. sam.gov sam.gov
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Industry

Newport News drives HII's shipbuilding margin gain

Newport News' profitability improved as Ingalls' declined. HII raised its full-year shipbuilding sales outlook while holding its shipbuilding margin forecast steady.

Using HII's definition, we calculate non-GAAP shipbuilding operating margin at 6.9% for the third quarter of 2026. That compares with 5.9% a year earlier and 6.3% in the second quarter.1

Newport News' margin rises while Ingalls' falls

HII's two shipbuilding segments. Non-GAAP segment operating margin, Q3 2025 versus Q3 2026.

Newport News · Q3 20254.9%
Newport News · Q3 20266.9%
Ingalls · Q3 20257.9%
Ingalls · Q3 20266.7%

Source: HII Q3 2026 earnings release, Exhibit 99.1 to Form 8-K. Data as of October 29, 2026.

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Newport News Shipbuilding supplied the improvement. Its segment operating margin rose to 6.9% from 4.9% a year earlier. Revenue grew 18.1%. HII attributed the operating income increase primarily to Virginia-class submarine contract adjustments and incentives and higher submarine and aircraft carrier volumes.1

The release gives no dollar value for the Virginia-class adjustments and incentives. It therefore does not show how much of Newport News' profit improvement came from those items or higher volumes.1

At Ingalls Shipbuilding, revenue grew 5.8%. Segment operating margin fell to 6.7% from 7.9% a year earlier. HII attributed the operating income decline primarily to lower performance in surface combatants.1

HII received $32.4 billion in new contract awards during the quarter. President and CEO Chris Kastner said that with those awards, HII has now secured approximately 90% of its expected shipbuilding revenue through 2030.1

HII raised its full-year shipbuilding revenue outlook to $10.5 billion to $10.7 billion. Previously, it projected $10.2 billion to $10.4 billion. Its shipbuilding operating margin forecast remains 6.0% to 6.5%.1

Sources (2)
  1. HII third quarter 2026 results, Exhibit 99.1 to Form 8-K (Oct. 29, 2026) www.sec.gov
  2. HII second quarter 2026 results, Exhibit 99.1 to Form 8-K (July 30, 2026) www.sec.gov
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