The defense contractor was set to finish production of about 52 of the upgraded TR-3 model fighter jets by 31 December and approximately 12 per month after that, or 72 more by June 30, for as many as 124 jets.

However, according to the Pentagon's F-35  spokesman Russ Goemaere the military is withholding $7 million per aircraft until the new software is validated because the aircraft are being placed in storage until then.

At 124 jets, that's $868 million.

Last month, the Defense Department withheld $7 million on each of the first four upgraded F-35s. The aircraft needs the delay-plagued software upgrade to function fully with new cockpit hardware before it can carry more precise weapons and gather more information on enemy aircraft and air defenses.

The upgrade will increase processing power 37 times and memory 20 times over the F-35's current capabilities.