AMD Finalizes $3B Sale of ZT Systems’ Server Manufacturing Unit to Sanmina

Semiconductor giant AMD has finalized a $3 billion agreement to sell the server-manufacturing arm of ZT Systems to electronics manufacturing services provider Sanmina.

Figure 1. AMD to Sell ZT Systems' Server Manufacturing Arm to Sanmina in $3B Deal.

The deal—comprised of $2.25 billion in cash, a $300 million premium (split evenly between cash and equity), and a potential $450 million contingent on performance over the next three years—is expected to close by the end of 2025, pending regulatory approval, according to Reuters. Figure 1 shows AMD to Sell ZT Systems' Server Manufacturing Arm to Sanmina in $3B Deal.

This move follows AMD’s acquisition of ZT Systems, an AI and cloud infrastructure company, for $4.9 billion in August 2024. At that time, AMD had already signaled its intention to divest ZT’s manufacturing business after the deal closed, which occurred in March 2025.

Following the divestiture, AMD will retain ZT Systems’ rack-scale AI solutions design business. Additionally, AMD announced that Sanmina will become its “preferred” manufacturing partner for new product introductions in cloud rack and cluster-scale AI systems.

“Forrest Norrod, executive vice president and general manager of AMD’s data center solutions unit, commented, ‘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 and accelerate time-to-market for our cloud customers.’

Background – AMD and ZT Systems

• AMD (Advanced Micro Devices): A leading semiconductor company known for its CPUs and GPUs powering everything from gaming to AI data centers.
• ZT Systems: A cloud and AI infrastructure company that AMD acquired in 2024 for $4.9 billion. It had two key segments:

• AI systems design (which AMD wanted to keep)
• Server manufacturing (which AMD planned to sell from the beginning)

The $3 Billion Deal with Sanmina

AMD is selling the server manufacturing portion of ZT Systems to Sanmina, a company that specializes in electronics manufacturing services.

Deal breakdown:

• $2.25B in cash
• $300M premium (50% cash, 50% equity)
• $450M contingent on performance over 3 years
• The sale is expected to close by the end of 2025, subject to regulatory approval.

AMD’s Strategy – Why Sell This Business?

AMD only wanted ZT’s AI and cloud system design expertise—not its hardware manufacturing facilities.

By selling the manufacturing unit, AMD can:

• Focus on high-margin AI infrastructure solutions
• Avoid the operational complexity of running manufacturing plants
• Partner with Sanmina instead of owning physical production assets

What Sanmina Gains

• Sanmina adds a $3B asset to its portfolio, strengthening its position in server manufacturing.
• Gains a preferred supplier status with AMD for AI systems, giving it long-term revenue and influence in the AI infrastructure space.
• Access to AMD’s cloud and data center clients through this partnership.

Broader Impact – What This Means for the Industry

• AMD sharpens its focus on AI and cloud solutions, aligning with market demand.
• Sanmina’s role grows in the AI hardware supply chain, especially in the U.S.
• The move shows a trend: tech giants are streamlining operations, owning what adds the most value (like AI design) and outsourcing the rest (like manufacturing).

Source: TC

Cite this article:

Priyadharshini S (2025), AMD to Acquire ZT Systems’ Server Manufacturing Unit In $3B Deal, AnaTechMaz, pp. 88