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<\/p>\nMitsubishi Heavy Industries (MHI) has been awarded a contract by Japan\u2019s Acquisition, Technology & Logistics Agency (ATLA) to build three upgraded Mogami-class multi-mission frigates (FFM), with a total contract value of 128.6 billion yen ($806 million). The award was recently disclosed by ATLA.<\/p>\n
The three ships correspond to the third through fifth units of the new 4,800-ton-class FFM, an enhanced variant of the Japan Maritime Self-Defense Force\u2019s (JMSDF) Mogami-class frigate\u2014known in Tokyo as the \u201cNew FFM\u201d and also called as the 06FFM.<\/p>\n
The contract was signed on February 16, 2026, with MHI acting as the prime contractor. The new FFM is positioned as a core platform in the JMSDF\u2019s next-generation surface fleet, building on the baseline Mogami-class design while incorporating enhanced mine countermeasure capabilities and improved unmanned systems integration.<\/p>\n
Notably, the upgraded FFM is expected to feature significantly improved air defense and radar capabilities, bringing it closer in role and capability to a missile frigate (FFG). ATLA had previously awarded MHI a contract worth about 79.6 billion yen on March 27, 2025, for the construction of the first two ships of the class, making the latest award a follow-on order.<\/p>\n
Budget vs. Contract Cost Gap<\/p>\n
The 128.6 billion yen contract has drawn attention due to the apparent gap with Japan\u2019s FY2025 defense budget. The budget allocated 314.8 billion yen for the same three ships (units 3\u20135), implying a per-unit cost of roughly 104.9 billion yen. By contrast, the contract value suggests a per-ship cost of about 42.8 billion yen, creating what appears to be a substantial discrepancy.<\/p>\n
According to ATLA, however, the difference stems from the scope of the figures. The 314.8 billion budget yen allocation includes not only hull construction but also the procurement of onboard systems such as radar, sonar, and communications equipment. In contrast, the 128.6 billion yen contract covers only the shipyard portion\u2014specifically hull construction\u2014and excludes the cost of onboard systems. As such, the 42.8 billion yen figure reflects only the platform cost and not the total cost of a fully equipped warship.<\/p>\n
This distinction highlights a common feature of modern defense procurement, where hull construction and mission systems are contracted separately. As sensor and combat system costs continue to rise, they represent an increasingly large share of total platform cost.<\/p>\n
Rising Costs Driven by Inflation<\/p>\n
Data from Japan\u2019s Ministry of Defense and Maritime Staff Office indicate that the unit cost of both the Mogami-class and its upgraded successor has increased significantly in recent years.<\/p>\n
Rising global material costs, currency depreciation, and inflation have all contributed to higher shipbuilding costs.<\/p>\n
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Upgraded Mogami-class Industrial Teaming: MHI and JMU<\/p>\n
Under the procurement framework established through a 2023 competitive process, MHI serves as the prime contractor, with Japan Marine United (JMU) participating as a subcontractor.<\/p>\n
For the first five ships already under contract, construction responsibilities are divided as follows:<\/p>\n
Units 1\u20132 (contracted in March 2025): one ship each for MHI and JMU<\/p>\n
Units 3\u20135 (contracted in February 2026): two ships for MHI and one for JMU<\/p>\n
Hull numbers have not yet been assigned, as JMSDF ship designations are typically allocated at launch.<\/p>\n
Upgraded Mogami-class Program Outlook and Export Potential<\/p>\n
A total of 12 upgraded FFMs are planned. Japan\u2019s FY2026 budget includes 104.3 billion yen for the sixth ship.<\/p>\n
The design has also been selected as the basis for the Royal Australian Navy\u2019s future general-purpose frigate program<\/a>, making it a key pillar of Japan\u2019s defense export strategy. Tokyo has approved approximately 15.1 billion yen in subsidies to support MHI\u2019s efforts related to the export program.<\/p>\n Upgraded FFM Capabilities and Armament<\/p>\n