Missile defense market poised for growth.

• Author: Machi, Vivienne
• Position: Global Defense

The announcement to approve foreign military sales for Raytheon's Standard Missile 6 could be a game changer for the global missile defense market, an analyst said.

The State Department in January authorized the SM-6 for foreign military sales, a move that could be a financial boon for Raytheon's overseas market.

The same month, the Defense Department awarded $235 million to the company for SM-6 production and spares. The award funds the fourth year of full-rate production for the missile, according to the company. Raytheon will begin delivery in 2018, and the missiles will be deployed on Aegis cruisers and destroyers.

The company has been seeking the option to sell the SM-6 abroad since the missile reached initial operating capability in 2013, said Thadeous Smith, SM-6 program representative at Raytheon.

"As a growth engine, international sales obviously helps us because it's a growth path for the company, but it also helps the U.S. Navy reduce their overall cost, because we get cost savings based on quantities," he said. "And it benefits the people in the U.S. Navy to go fight with or defend someone with similar capability."

The SM-6 provides ships with extended-range protection against fixed and rotary-wing aircraft, unmanned aerial vehicles, cruise missiles and ballistic missiles in the terminal phase of flight, according to Raytheon.

It was originally developed as a defensive missile, Smith said. The company performed software updates that enabled the system to address two additional mission sets as an anti-air warfare and anti-ship precision weapon.

"After [building] about the first 150 to 200, we changed a processor that needed to be upgraded," he said. "If we hadn't changed the processor, we wouldn't have been able to add the software needed to add the two new missions."

The greenlighting of SM-6 for foreign military sales is a game changer, said Thomas Karako, a senior fellow at the Center for Strategic and International Studies, a Washington, D.C.-based think tank.

"They can do a little air defense and ballistic defense, but also be an anti-ship missile," he said.

Then-Defense Secretary Ashton Carter touted the SM-6's anti-ship capabilities last year in a visit to Naval Base San Diego.

"We're modifying the SM-6 so that in addition to missile defense, it can also target enemy ships at sea," Carter said. "It makes the SM-6 basically a twofer. You can shoot down airborne threats, and now you can attack and destroy a ship at long...