American design-manufacturing firm Key Tronic to expand in Vietnam due to tariff

Key Tronic, a leading American design and manufacturing service provider, plans to “significantly” increase its production capacity in Arkansas (the United States) and Vietnam.

In its review for the quarter ended December 2024 (second quarter of fiscal year 2025), Key Tronic said the move aims to serve the growing customer demand for rebalancing their contract manufacturing.

The investment can “help mitigate the adverse impact and uncertainties surrounding the recently announced tariffs on goods manufactured in China and Mexico,” said Brett Larsen, president and CEO of Key Tronic. [The tariffs on Mexico has been paused for one month, just hours before it was set to go into effect].

Besides, Key Tronic reported that its total revenue in the quarter went down to $113.9 million, from $147.8 million in the same period of fiscal year 2024.

It attributed the fall to unexpected shortages for specific components managed by a large customer, lower-than-expected production during the holiday season, and reduced demand from certain customers.

Headquartered in Washington state, Key Tronic operates facilities in the United States, Mexico, China, and Vietnam.

The Vietnam facility is located in the central coastal city of Danang. Key Tronic received an investment registration certificate to invest $70 million in Danang in 2019, with an annual capacity of 100 million vehicle items.