AMD (AMD) has announced a definitive agreement to divest the data center infrastructure manufacturing operations of ZT Systems to Sanmina Corporation (SANM) in a deal valued at $3 billion. The transaction includes a combination of cash and stock, with a contingent payment of up to $450 million, and is expected to close by the end of 2025 pending regulatory approvals.<\/p>\n\n\n\n
This move aligns with AMD\u2019s previously stated strategic intent at the time of its August 2024 acquisition of ZT Systems. The company is now executing on its plan to offload the manufacturing segment while preserving critical AI design and customer support capabilities. AMD will retain ZT Systems’ renowned rack-scale AI systems design and customer enablement teams to support the development and deployment of next-generation AI infrastructure.<\/p>\n\n\n\n
As part of the agreement, Sanmina becomes AMD\u2019s preferred new product introduction (NPI) manufacturing partner for cloud rack and cluster-scale AI solutions. The collaboration is expected to enhance U.S.-based manufacturing capabilities, reduce time-to-market, and improve quality standards for AMD\u2019s AI offerings targeting hyperscale cloud customers.<\/p>\n\n\n\n
\u201cBy combining the deep experience of our AI systems design team with our new preferred NPI partnership with Sanmina, we expect to strengthen our U.S-based manufacturing capabilities for rack and cluster-scale AI systems and accelerate quality and time-to-market for our cloud customers,\u201d said Forrest Norrod, executive vice president and general manager of AMD\u2019s Data Center Solutions business unit.<\/p>\n\n\n\n
The sale marks a continued evolution of AMD\u2019s strategy to focus on high-value innovation while leveraging manufacturing partnerships to scale. Sanmina, a seasoned leader in integrated manufacturing solutions, will inherit a robust infrastructure operation and collaborate closely with AMD to support the growing demands of AI-driven cloud environments.<\/p>\n\n\n\n
Despite the divestiture, AMD emphasized that ZT Systems\u2019 manufacturing expertise remains \u201ca very important and strategic partner,\u201d reinforcing the collaborative spirit of the new partnership with Sanmina. The deal is positioned to reinforce AMD\u2019s open ecosystem approach while enhancing the agility and efficiency of its AI infrastructure delivery.<\/p>\n\n\n\n