Lockheed Boosts Defense Tech With Key Microelectronics Partnerships

Microelectronics are crucial to modern defense systems, providing the core technology for advanced radar, secure communications, missile guidance, and electronic warfare. Therefore, to maintain its leadership position in the global defense market, Lockheed Martin Corp. (LMT), the United States’ largest defense contractor, is leveraging advanced microelectronics technology to deliver next-generation "21st Century Security" solutions.

By leveraging advanced microchips, the company is developing more compact sensors and faster processors, which enhance the performance and resilience of platforms like fighter jets and satellites. This strategy of technological integration is key to maintaining a competitive edge in the evolving defense space.

To ensure a secure supply chain and drive innovation, Lockheed has been collaborating with leading microelectronics companies. A key collaboration of this company includes its agreement with Intel and its subsidiary Altera, signed in April 2024, focused on the Stimulating Transition for Advanced Microelectronics Packaging program. This program involved the development of a low-size, weight, and power (SWaP) airborne electronic defense system for the U.S. Navy’s MH-60R helicopters, enhancing their situational awareness and defensive mechanisms.

Next, in February 2025, LMT’s subsidiary ForwardEdge ASIC joined hands with Honeywell to develop durable, radiation-resistant microelectronics for space applications. With the increasing use of space technology in defense applications, this collaboration should also prove to be beneficial in strengthening Lockheed’s position as a reliable defense contractor.

Meanwhile, Lockheed has been in partnership with GlobalFoundries since 2023 to boost U.S. semiconductor manufacturing, a move that directly supports the CHIPS and Science Act and secures a domestic supply chain.

These strategic collaborations should not only help Lockheed efficiently upgrade its existing defense technology products but also reduce its reliance on foreign suppliers, ensuring a smooth supply chain, particularly amid tariff-related uncertainty.

Other Defense Stocks to Watch

LMT apart, other defense stocks that are actively involved in upgrading their products with next-generation microelectronics, either through collaboration or their own, are mentioned below:

Northrop Grumman (NOC): This company’s microelectronics manufacturing facilities deliver millions of defense microelectronics annually. NOC recently opened its microelectronics center, allowing external defense companies to access its three U.S. government-accredited semiconductor manufacturing facilities. It did so in a bid to secure domestic production of defense microelectronics.

RTX Corp. (RTX): In collaboration with government labs and commercial industry partners, RTX’s Raytheon Advanced Technology team is engaged in developing next-generation multi-chip packaging for use in ground, maritime and airborne sensors. RTX is currently working with AMD to create a compact microelectronics package that will convert radio frequency energy to digital information with more bandwidth and higher data rates.

The Zacks Rundown for LMT

Shares of Lockheed have risen 6.2% in the past month compared with the industry’s growth of 2.9%.

From a valuation standpoint, LMT is currently trading at a forward 12-month earnings multiple of 17.37, a discount when stacked up with the industry average of 28.24.

The Zacks Consensus Estimate for LMT’s near-term earnings has moved south over the past 60 days.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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