AMD To Sell ZT Systems’ Server Manufacturing Unit To Sanmina For $3B

Having sought a buyer for ZT Systems’ server manufacturing unit since the deal to acquire the company was announced last August, AMD says Sanmina will become a preferred new product introduction manufacturing partner for its cloud rack and cluster-scale AI solutions.

AMD said it has reached an agreement to sell ZT Systems’ server manufacturing business to U.S. electronics manufacturing services giant Sanmina for $3 billion.

Announcing the deal on Monday, the Santa Clara, Calif.-based chip designer restated its intention to keep ZT Systems’ rack-scale AI solutions design and customer enablement teams, which joined AMD’s data center solutions business in March when it closed on its acquisition of ZT Systems for $4.9 billion to boost its AI data center offerings for hyperscalers and enterprises.

[Related: Nvidia Reveals Offering To Build Semi-Custom AI Systems With Hyperscalers]

Having sought a buyer for ZT Systems’ manufacturing unit since the deal to acquire the Secaucus, N.J.-based company was announced last August, AMD said Sanmina will become a preferred new product introduction (NPI) manufacturing partner for its cloud rack and cluster-scale AI solutions as part of the deal to divest ZT Systems’ manufacturing division.

“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,” said Forrest Norrod, executive vice president and general manager of AMD’s data center solutions business, in a statement.

With the deal expected to close near the end of 2025, Sanmina has agreed to pay AMD $3 billion in stock and cash for the manufacturing business, which includes a contingent payment of up to $450 million and is “subject to customary adjustments for working capital and other items.”

“The ZT Systems manufacturing business and its expert team remain a very important and strategic partner to AMD. We look forward to working with Sanmina to deliver world-class design, quality and manufacturing of AMD AI solutions supported by our open ecosystem approach,” Norrod said.

Based in San Jose, Calif., Sanmina employs about 34,000 people across 21 countries on four continents. As an integrated manufacturing provider, the company serves the “fastest-growing segments of global electronics manufacturing services” and offers “end-to-end design, manufacturing, logistics and repair solutions for OEMs across a variety of industries,” AMD said.

“ZT Systems’ liquid-cooling capabilities, high-quality manufacturing capacity and significant cloud and AI infrastructure experience are the perfect complement to Sanmina’s global portfolio, mission-critical technologies and vertical integration capabilities,” said Jure Sola, chairman and CEO of Sanmina, in a statement.