Key Tronic to Invest $28M in Springdale Expansion

An aerial view of Key Tronic's new facility at the I-49 Logistics Park in Springdale (Photo provided by Bennett Commercial Real Estate)

Key Tronic Corp. of Spokane Valley, Washington, a provider of electronic manufacturing services, on Thursday announced plans to expand its operations in Arkansas with a $28 million investment in a facility in Springdale.

The move from a smaller facility to the 290,540-SF manufacturing, research and development center at 601 W. Apple Blossom Ave. later this year is expected increase the company’s U.S. production capacity by about 40%.

About 400 jobs will be created.

The project at the I-49 Logistics Park was announced as part of a broader expansion of Key Tronic’s manufacturing operations. The company recently landed a deal worth $60 million annually to manufacture an “industry leading, innovative energy resiliency product.” Initial production is slated for late 2025 in Arkansas and in Juarez, Mexico.

In a news release, publicly traded Key Tronic (NASDAQ: KTCC) said it’s expanding production to meet rising demand for domestic contract manufacturing. That demand has been driven in part by customers looking to mitigate the impact of President Donald Trump’s tariffs on foreign goods. The company is also doubling its production capacity at its factory in Vietnam.

“These initiatives reflect the longstanding trend to nearshore production away from China, and may also help address the potential adverse impact of tariff increases,” Brett Larsen, president and CEO of Key Tronic, said in the release. “Our U.S.-based production provides customers with outstanding flexibility, engineering support, and ease of communications, and our Vietnam-based production offers the high-quality, low-cost choice that was associated with China in the past.”

Key Tronic was founded in 1969 as a simple keyboard manufacturer and has evolved into a global contract manufacturer with design engineering, electronics, plastics, metals and full product assembly capabilities. It has operated in Arkansas since 1985.

Key Tronic reported a loss of $800,000 in its 2024 fiscal year, down from a profit of $5.2 million the year before. Revenue was $559.4 million, down 4.9% from $588.1 million in 2023.

The company signed a 10-year lease for its new facility in Springdale, which was built by Crossland Construction Co. of Columbus, Kansas, in 2023. Tenant improvements are slated for completion in third quarter of 2025.

The state offered the following incentives for the project: $1 million from the Governor’s Quick Action Closing Fund; 10 years of the Create Rebate program, an annual cash rebate based on the number of jobs added by a company and targeted wages; the Tax Back program, which provides sales and use tax refunds on the purchase of building materials and taxable machinery; and $500,000 from the Business and Industry Training Program, which helps new and expanding businesses with recruiting workers, pre-employment training, on-the-job training and train-the-trainer programs.