AMD sells ZT Systems’ Manufacturing Unit to Sanmina to $3 billion
AMD recoups most of its ZT Systems acquisition cost by selling its manufacturing arm
AMD has announced that it has agreed to sell ZT Systems’ manufacturing business to Sanmina for $3 billion. This deal will be paid for in cash and stock and includes a contingent payment of $450 million.
AMD completed its acquisition of ZT Systems for $4.9 billion in March. During this acquisition, AMD was clear that they didn’t want to keep ZT Systems’ manufacturing business; they wanted their “rack-scale AI solutions design and customer enablement expertise.” AMD didn’t want to compete with its customers/partners by manufacturing and selling its own servers.
AMD’s deal to sell ZT Systems’ manufacturing business to Sanmina is due to close before the end of 2025. This sale will recoup most of AMD’s ZT Systems acquisition costs, allowing the company to invest those funds elsewhere.
AMD (NASDAQ: AMD) today announced it has entered into a definitive agreement to sell ZT Systemsâ U.S.-headquartered data center infrastructure manufacturing business to Sanmina (NASDAQ: SANM), a leading integrated manufacturing solutions company. As part of the transaction, Sanmina becomes a preferred new product introduction (NPI) manufacturing partner for AMD cloud rack and cluster-scale AI solutions. AMD will retain ZT Systemsâ world-class design and customer enablement teams to accelerate the quality and time-to-deployment of AMD AI systems for cloud customers.
Sanmina will purchase the manufacturing business from AMD for $3 billion in cash and stock, inclusive of a contingent payment of up to $450 million and subject to customary adjustments for working capital and other items. The transaction is expected to close near the end of 2025, subject to regulatory approvals and customary closing conditions. The intent to seek a strategic partner to acquire ZT Systemsâ world-class data center infrastructure manufacturing business was announced in August 2024 at the time of the original acquisition announcement.
Overall, this deal is a major win for AMD. AMD has managed to get what it wanted from ZT Systems and recoup most of its investment costs by selling the rest of Sanmina. AMD plans to use the expertise of ZT Systems’ former engineers to deliver a ânew class of end-to-end AI solutions based on a combination of AMD CPU, GPU, and networking silicon.â In other words, this acquisition should help AMD accelerate the design and deployment of new AI systems.
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