A while back Walther gave S&W license rights to manufacture their guns in the USA. Yes the gun you have was built by S&W with imported Walther parts. I beleive that in time all new Walthers in the US will be built 100% by S&W.
Interesting... My PPK/S rollmark reads: "Smith & Wesson Houlton, ME USA"
I wonder how many factories they're making these in or if they maybe just moved production from one factory to another? My PPK/S is fairly new (bought it new about 2 years ago to use as a BUG).