The U.S. and Japan partnered to build the SM-3 IIA after North Korea test-fired a ballistic missile over Japan in 1998. The new missile defense system would help protect Japan with fewer ships during an attack. U.S. Rear Admiral Brad Hicks said other countries are interested in similar partnerships.

What caused costs to climb? Hicks points to the defense budget. The Pentagon canceled Lockheed Martin’s Multiple Kill Vehicle program, which affected SM-3 IIA missile technology. As expected, Iran’s and North Korea’s nuclear ambitions raise the stakes in the effort to fund missile defense programs. The president proposes to slash $1.4 billion from the missile defense budget, although the budget may include funding to increase production of Aegis ships equipped with 218 SM-3 missiles.