From key- in keyboard and -tar in guitar, the noun keytar denotes a synthesizer designed to be held in the manner of a guitar, with one hand playing a keyboard while the other operates controls on an extended handle.

The noun keytar occurs, for example, in Everything’s more fun with my cherry-red keytar—the Christmas present I’ll never forget, by Helen Pidd, North of England editor of The Guardian, published in The Guardian (London and Manchester, England) of Friday 23^rd December 2022:

I married a bassist and mentioned one day that I’d always wanted to play the ultimate 80s instrument: the keytar. When I was young there was a cartoon called Jem and the Holograms, about a record company boss called Jerrica Benton who wore special earrings which, when rubbed, turned her into the “truly, truly, truly outrageous” Jem, a punky pop star. Jerrica’s neat blond hair turned into a shaggy pink mullet and suddenly she was the lead singer of the Holograms. With boring blond hair and the sort of safe face people ask for directions, I loved the idea of a cooler alter ego, though I fancied myself less as the frontwoman than as Jem’s sister, Kimber, who sometimes had a keyboard strung around her neck like a guitar.

The earliest occurrences of the noun keytar that I have found are as follows, in chronological order:

1-: From Styx Holds Musical Event, the review of a concert given by Styx (a U.S. rock band from Chicago) at the Taylor County Coliseum, in Abilene, Texas, on Friday 16^th February 1979—review by Greg Jaklewicz, Staff Writer, published in the Abilene Reporter-News (Abilene, Texas, USA) of Sunday 18^th February 1979:

Warming up Styx was Angel ¹ and the five-man group played one of the best opening gigs in Abilene in many concerts. All five men were dressed in silky white costumes, each individualized by some outrageous accessory such as a silver garter or bushy white fox tail.
Angel played basically hard, driving rock and roll with the exception of “Don’t Leave Me Lonely.” The group played the recognizable “Ain’t Gonna Leave No More” heard occasionally on FM stations.
Highlight of Angel’s performances was a keytar solo. That’s right, a keytar. The instrument is unique to Angel and is a portable keyboard in the Gary Wright ² style with a connecting guitar-lile [sic] neck.

¹ Angel is a U.S. rock band from Washington, D.C.
² Gary Wright (born 1943) is a U.S. singer-songwriter.

2-: From the caption to the following photograph, published in the Ottawa Journal (Ottawa, Ontario, Canada) of Thursday 19^th April 1979:

A key-tar!

What is that?
That, for the unconverted, is a Key-tar, a combination guitar and piano organ, which Rick Wakeman ³ of the band Yes used to some advantage at the group’s Ottawa concert earlier this week.
Why bother?
Simple. Wakeman says he is normally tied to his various banks of keyboards and rarely gets a chance to boogie with the rest of the band. Since he can’t play a guitar, he decided to hinge on a compromise.
At the Ottawa concert Wakeman was able to stride around the group’s circular stage and though he looked somewhat uncomfortable, had the crowd on its feet.

³ The British keyboardist Richard Wakeman (born 1949) was then a member of the British progressive-rock band Yes.

3-: From the review of a concert given by the Allman Brothers Band (a U.S. rock band from Jacksonville, Florida) at the Grand Ole Opry House, in Nashville, Tennessee, on Sunday 22^nd November 1981—review by Robyn Wells, published in Billboard (New York City, New York, USA) of Saturday 5^th December 1981:

The mainstay of the show was the finely honed musicianship of the seven member band. This was especially apparent in “The Judgment,” which featured David Goldflies driving his bass with the relentlessness of a jackhammer, Mike Lawler on keyboards and key tar (a synthesized amalgamation of keyboards and guitar designed by Lawler) and a dueling drum sequence between Butch Trucks and David Toler.