Why This Matters to Distributors: DigiKey is adding warehouse automation and order processing capacity to protect same-day fulfillment as demand increases. The investment builds on space reserved during an earlier expansion, illustrating how planning for growth can accommodate additional equipment and higher order volumes.
DigiKey will invest $100 million over 18 months to expand distribution capacity and upgrade its order management system as the electronic components distributor anticipates growth exceeding 50% in 2026.
The project will add picking capacity, automated order retrieval, and packing systems at its global distribution center in Thief River Falls, Minnesota. DigiKey announced the investment on Oct. 14, saying it would help maintain same-day fulfillment as order volumes increase.
The first new automated packing system is already on-site and is expected to begin operating this year. Additional packing systems will be introduced in phases, the company said.
“Our customers choose DigiKey because they know we’re fast and they know we’ll be fast tomorrow,” CEO Dave Doherty said in the announcement. “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.”
DigiKey said it expects growth exceeding 50% this year, followed by double-digit growth in 2027. The announcement did not provide sales, profit figures, or specify how the investment would be divided between distribution operations and the order management system.
The work builds on a 2.2 million-square-foot distribution center expansion that opened in August 2022. DigiKey reserved space for future growth, leaving portions of the building, including much of the fourth floor, available for additional operations.
New picking bays, automated retrieval equipment, and expanded packing operations will manage a growing share of orders across different product sizes and configurations. The company said the additions are designed to increase processing speed and efficiency.
“Simplification creates capacity, and capacity creates growth,” Doherty said. “We’re redirecting resources from legacy work to future capabilities and investing in where we’re going, not just where we’ve been.”
DigiKey serves more than 1 million customers annually and stocks more than 1.9 million products available for same-day shipment from the distribution center, according to the company. Its broader catalog includes more than 17.4 million components from over 3,000 manufacturers.
Headquartered in Thief River Falls, DigiKey distributes electronic components and automation products to customers including engineers, designers, and procurement professionals.
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