Anduril Industries and the U.S. Navy have announced plans for a new shipyard at Sparrows Point, Maryland, that will manufacture major components for Virginia-class nuclear-powered attack submarines. The project, known as Arsenal-2, involves a $3.7-billion private investment from Anduril and a U.S. Navy contract worth up to $2.9 billion, bringing the planned commitment to as much as $6.6 billion.

According to Anduril, the facility will cover more than two million square feet and is expected to begin operations in 2030. It will produce complex submarine components and large assemblies, including torpedo tubes, while final submarine construction and assembly will remain with the U.S. Navy’s established prime shipbuilders. The company said payments under the Navy contract will be tied to demonstrated production results.

The project is intended to add manufacturing capacity to the U.S. submarine industrial base as the Navy works to increase production of Virginia-class submarines. A Congressional Research Service assessment cited in reports placed recent production at about 1.1 to 1.4 submarines per year, below the two-per-year rate generally funded by Congress, with workforce and supply-chain constraints affecting output.

Anduril said Arsenal-2 is expected to create more than 3,100 direct jobs by 2034 and generate about $2 billion in annual economic output. The Sparrows Point site, formerly associated with major steelmaking and shipbuilding operations, is now part of the Tradepoint Atlantic industrial complex. The new facility forms part of broader U.S. efforts to increase submarine production capacity and meet future Navy requirements.