AMD has finalized the sale of the ZT Systems data center infrastructure manufacturing business to Sanmina in a transaction valued at up to $3 billion in cash and equity. The deal includes a $2.25 billion cash payment, a $300 million premium split equally between cash and equity, and a contingent performance-based payment of up to $450 million. The transaction, announced earlier this year and now completed following regulatory approvals, establishes Sanmina as AMD’s preferred new product introduction (NPI) manufacturing partner for rack and cluster-scale AI systems.
As part of the deal, AMD retains ZT Systems’ rack-scale AI systems design and customer enablement teams while transferring its manufacturing operations to Sanmina. This allows AMD to concentrate on its core competencies in silicon, software, and systems architecture while leveraging Sanmina’s global production capabilities. The sale also fulfills AMD’s strategic goal, outlined during its $6.5 billion acquisition of ZT Systems in August 2024, to find a specialized manufacturing partner capable of scaling high-performance data center infrastructure.
For Sanmina, the acquisition represents a major expansion into the AI and cloud infrastructure market. The company plans to integrate ZT Systems’ advanced manufacturing sites in New Jersey, Texas, and the Netherlands into its global footprint, which already includes U.S. and European facilities. The addition of liquid cooling expertise and full rack integration capabilities is expected to double Sanmina’s revenue within three years and be accretive to non-GAAP EPS in the first year. Bank of America has provided $2.5 billion in committed financing to support the transaction.
• Sanmina acquires ZT Systems’ manufacturing business from AMD for up to $3 billion
• AMD retains ZT Systems’ design and customer enablement teams
• Sanmina becomes AMD’s preferred NPI manufacturing partner for AI systems
• Deal includes $2.25B cash, $300M premium (50% cash, 50% equity), and up to $450M performance-based payment
• ZT Systems’ manufacturing business generates $5–$6B in annual revenue
• Facilities in New Jersey, Texas, and the Netherlands expand Sanmina’s footprint
• Transaction expected to be accretive to Sanmina’s non-GAAP EPS in Year 1
• Sanmina secures $2.5B in committed financing from Bank of America
“Forrest Norrod, executive vice president and general manager of AMD’s Data Center Solutions business unit, said, ‘By 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.’”
🌐 Analysis: AMD’s decision to divest ZT Systems’ manufacturing arm underscores a pivot toward an asset-light model that prioritizes design innovation and platform enablement over production. When AMD acquired ZT Systems in 2024, it gained valuable rack-scale design and integration expertise to complement its expanding portfolio of EPYC CPUs and Instinct GPUs. However, owning a large-scale manufacturing footprint proved misaligned with AMD’s strategy to focus capital on high-growth, high-margin businesses such as AI accelerators, ROCm software, and system architecture. Partnering with Sanmina enables AMD to reduce operational overhead, preserve critical engineering talent, and speed AI system deployments for hyperscalers—an approach similar to NVIDIA’s reliance on contract manufacturers for its DGX systems. For Sanmina, the acquisition positions the company as a leading manufacturer of next-generation AI and cloud infrastructure, significantly broadening its role in the data center supply chain.
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