DigiKey to invest $100 million in distribution expansion amid 50% growth
DigiKey is putting USD 100 million over the next 18 months into expanding its distribution centre in Thief River Falls, Minnesota, and its order management system. The component distributor expects to grow by more than 50% this year.
The money will fund the next phases of the product distribution centre’s expansion, adding high-volume picking capacity and more automated packing, according to a press release from DigiKey. The first new automated packing system is already on site and will be in use this year, with further multi-line packing automation to follow. Alongside the warehouse, the company is also upgrading its order management system.
The investment comes after what DigiKey describes as a year of extraordinary growth. The company is on track to grow by more than 50% in 2026, and expects continued double-digit growth next year.
"Our customers choose DigiKey because they know we're fast and they know we'll be fast tomorrow," said DigiKey CEO Dave Doherty. "A $100 million commitment says exactly that: we're expanding capacity and automating where it counts to keep same-day fulfillment the standard, not the exception."
The distribution centre’s latest expansion, covering 2.2 million square feet (around 204,000 square metres), opened in August 2022 and was built with room to grow. Many areas were left open and much of the fourth floor was left empty for future expansion. New picking bays, automated order retrieval and expanded packing will now be added to handle more of the order volume.
According to Doherty, part of the expansion will be funded by moving resources away from older processes.
“We’re redirecting resources from legacy work to future capabilities and investing in where we’re going, not just where we’ve been,” he said.
DigiKey serves around one million customers a year and has more than 1.9 million products in stock for same-day shipping.
