AMD Sells ZT Systems' Server Manufacturing Business to Sanmina for $3 Billion

AMD strikes a deal to sell ZT Systems' server-manufacturing business for $3B | TechCrunch

Semiconductor giant AMD followed through with its plan to spin out ZT Systems' server-manufacturing business. AMD announced on Monday that it was selling ZT Systems' server-manufacturing business to electronic manufacturing services company Sanmina. The $3 billion deal is a mix of cash and stock: $2.25 billion in cash, a $300 million premium including 50% cash and 50% equity, and a $450 million contingent payment based on financial performance over the next three years, according to Reuters. The deal is expected to close by the end of 2025, subject to regulatory approval. After this divesture, AMD will maintain control of ZT Systems' rack-scale AI solutions design business. This announcement isn't a shock. When AMD announced its intent to acquire ZT Systems, an AI and cloud infrastructure company, for $4.9 billion in August 2024, the company said at the time that it planned to divest that part of ZT Systems' business after the deal formally closed. AMD's acquisition of ZT Systems officially closed in March 2025, according to Reuters. Alongside this announcement, AMD said that Sanmina will become a "preferred" new product introduction manufacturing partner for AMD cloud rack and cluster-scale AI solutions. "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, data center solutions business unit at AMD, in the company's announcement.

AMD sells ZT Systems' server unit to Sanmina for $3 billion

AMD has completed its plan to spin out ZT Systems' server-manufacturing business, announcing on Monday that it is selling the division to electronic manufacturing services company Sanmina for $3 billion. The deal is structured as a mix of cash and stock: $2.25 billion in cash, a $300 million premium split equally between cash and equity, and a $450 million contingent payment based on financial performance over the next three years. The transaction is expected to close by the end of 2025, pending regulatory approval. Following the divestiture, AMD will retain control of ZT Systems' rack-scale AI solutions design business. This development is in line with AMD's initial plan when it announced its intent to acquire ZT Systems, an AI and cloud infrastructure company, for $4.9 billion in August 2024. At the time, AMD stated that it would divest ZT Systems' server-manufacturing business after the acquisition closed, which it did in March 2025. As part of the agreement, Sanmina will become AMD's "preferred" new product introduction manufacturing partner for cloud rack and cluster-scale AI solutions. Forrest Norrod, executive vice president and general manager of AMD's data center solutions business unit, said that the partnership will strengthen AMD's U.S.-based manufacturing capabilities for rack and cluster-scale AI systems and accelerate quality and time-to-market for cloud customers. Norrod's statement highlighted that AMD will combine its AI systems design team's expertise with its new partnership with Sanmina to achieve these goals.

AMD to sell ZT Systems' server-manufacturing business to Sanmina in $3 billion deal

AMD has agreed to sell the server-manufacturing business of recently acquired ZT Systems to Sanmina in a $3 billion deal, making the contract manufacturer its partner for building AI systems as the chipmaker works to onshore supply chains. AMD had announced a $4.9 billion buyout of ZT Systems last year and unveiled plans to break off its server manufacturing business and sell it once the transaction closes. The deal was completed in March. Under the agreement announced on Monday, AMD will retain ZT's AI systems design businesses and will work with Sanmina as a US-based manufacturing partner for its AI data center business. Shares of AMD were down 2.7% in premarket trading. "We expect to strengthen our US-based manufacturing capabilities for rack and cluster-scale AI systems and accelerate quality and time-to-market for our cloud customers," Forrest Norrod, executive vice president of AMD's data center solutions business unit, said in a statement. AMD has already taken steps to produce more of its chips on American soil amid global trade tensions and US President Donald Trump's efforts to expand domestic semiconductor manufacturing. The company had said last month its key processor chips would soon be made at TSMC's new production site in Arizona - the first time its products will be manufactured in the United States. Sanmina will pay $2.25 billion in cash for ZT Systems' data center infrastructure manufacturing business, along with $300 million premium consisting of 50% cash and 50% equity. The deal, expected to close near the end of this year, also includes a $450 million contingent consideration based on financial performance of the business over the next three years.

AMD Announces Agreement to Divest ZT Systems Data Center Infrastructure Manufacturing Business to Sanmina - Advanced Micro Devices (NASDAQ:AMD), Sanmina (NASDAQ:SANM)

$3 billion in cash and stock, inclusive of a contingent payment of up to $450 millionAMD retains ZT Systems' rack-scale AI solutions design and customer enablement expertise to accelerate quality and time-to-deployment for cloud customersDivestiture and preferred NPI manufacturing partnership with Sanmina consistent with intentions announced at the time of ZT Systems acquisition SANTA CLARA, Calif., May 19, 2025 (GLOBE NEWSWIRE) -- AMD AMD today announced it has entered into a definitive agreement to sell ZT Systems' U.S.-headquartered data center infrastructure manufacturing business to Sanmina 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 Systems' 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 Systems' world-class data center infrastructure manufacturing business was announced in August 2024 at the time of the original acquisition announcement. "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, Data Center Solutions business unit at AMD. "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." Sanmina is a U.S.-headquartered leading integrated manufacturing solutions provider serving the fastest growing segments of global Electronic Manufacturing Services (EMS), offering end-to-end design, manufacturing, logistics and repair solutions for OEMs across a variety of industries. "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 Corporation. "Together, we will be better able to deliver a competitive advantage to our customers with solutions for the entire product lifecycle. We look forward to our ongoing partnership with AMD as we work together to set the standard for quality and flexibility to benefit the entire AI ecosystem." Advisors Morgan Stanley & Co. LLC is acting as exclusive financial advisor to AMD and Latham & Watkins LLP is serving as the company's legal advisor. About AMD For more than 55 years AMD has driven innovation in high-performance computing, graphics and visualization technologies. Billions of people, leading Fortune 500 businesses and cutting-edge scientific research institutions around the world rely on AMD technology daily to improve how they live, work and play. AMD employees are focused on building leadership high-performance and adaptive products that push the boundaries of what is possible. For more information about how AMD is enabling today and inspiring tomorrow, visit the AMD AMD website, blog, LinkedIn and X pages. Cautionary Statement The statements in this press release includes forward-looking statements concerning Advanced Micro Devices, Inc. ("AMD"), ZT Group Int'l, Inc ("ZT Systems") and Sanmina Corporation ("Sanmina"), the proposed transaction described herein and other matters. Forward-looking statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. Forward-looking statements speak only as of the date they are made or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as there can be no assurance that the events or circumstances reflected in these statements will be achieved or will occur. Forward-looking statements can often, but not always, be identified by the use of forward-looking terminology including "believes," "expects," "may," "will," "should," "seeks," "intends," "plans," "pro forma," "estimates," "anticipates," "designed," or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. The forward-looking statements relate to, among other things, Sanmina as a preferred NPI strategic partner and expected benefits and results from such preferred strategic partnership; AMD's ability to accelerate the quality and time-to-deployment of AMD AI systems with ZT Systems design and customer enablement teams, obtaining applicable regulatory approvals, satisfying other closing conditions to the transaction, the expected timing of the transaction, the expected benefits to result from the transaction, AMD's ability to accelerate AI innovation while providing the choice and open ecosystem options that customers want, the ability of AMD to leverage the systems expertise of the ZT Systems design team while optimizing AMD's operational structure, and AMD's ability to drive growth across its data center and AI businesses. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the statements. These risks include, among other things: failure to formalize the contemplated preferred NPI manufacturing partnership between AMD and Sanmina or the failure for such preferred strategic partnership to achieve its anticipated results; failure to accelerate the quality and time-to-deployment of AMD AI systems with ZT Systems design and customer enablement teams; failure to obtain applicable regulatory approvals in a timely manner or otherwise; failure to satisfy other closing conditions to the transaction or to complete the transaction on anticipated terms and timing; negative effects of the announcement of the transaction; risks that AMD will not realize expected benefits from the transaction or may take longer to realize than expected; the risk that disruptions from the transaction will harm business plans and operations; significant transaction costs, or difficulties and/or unknown or inestimable liabilities in connection with the transaction; restrictions during the pendency of the transaction that may impact the ability to pursue certain business opportunities or strategic transactions; the potential impact of the announcement or consummation of the transaction on AMD's, Sanmina's or either of their relationships with suppliers, customers, employees and regulators; and demand for AMD's or Sanmina's products. For a discussion of factors that could cause actual results to differ materially from those contemplated by forward-looking statements, see the section captioned "Risk Factors" in AMD's Annual Report on Form 10-K for the fiscal year ended December 28, 2024, subsequent Quarterly Reports on Form 10-Q and other filings with the SEC. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. AMD does not assume, and hereby disclaims, any obligation to update forward-looking statements, except as may be required by law. Brandi Martina AMD Communications (512) 705-1720 [email protected] Liz Stine AMD Investor Relations (720) 652-3965 [email protected] AMDAdvanced Micro Devices Inc$114.03-2.68%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum21.70Growth82.79Quality71.20Value15.91Price TrendShortMediumLongOverviewSANMSanmina Corp$84.56-%Market News and Data brought to you by Benzinga APIs

AMD Enters Into An Agreement With Sanmina To Sell A Part Of ZT Systems For $3 Billion, While Retaining ZT's Server Design And Customer Enablement Expertise

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. In a largely expected development, AMD has entered into a definitive agreement to sell ZT Systems' data center infrastructure and manufacturing business to Sanmina for $3 billion. As per the terms of the deal, Sanmina will pay AMD $2.25 billion in cash, and a $300 million premium equally divided between cash and equity ($150 million each). Additionally, Sanmina will also make a contingent payment of $450 million to the chipmaker, based on the financial performance of the acquired assets over the next three years. For its part, AMD has designated Sanmina a preferred new product introduction (NPI) manufacturing partner for its cloud rack and cluster-scale AI solutions. This agreement is expected to achieve closure by the end of 2025. Do note that AMD had closed its $4.9 billion acquisition of ZT Systems only back in March 2025. Since then, the chipmaker had been working on selling ZT parts in lucrative deals. Bear in mind that AMD's ~$3 billion deal for ZT Systems' data center manufacturing business falls at the low-end of analysts' estimates, with Loop Capital recently predicting a ~$3.5 billion price tag. Meanwhile, as we noted last week, AMD has now increased its share buyback authorization by $6 billion. When coupled with the ~$4 billion in existing authorizations (as of the 29th of March 2025), the company's total outstanding buyback authorization now equals ~$10 billion. This development comes as AMD bought $749 million worth of its shares in the first quarter of 2025. Also, HUMAIN, the AI-focused subsidiary of Saudi Arabia's Public Investment Fund (PIF), has now inked an agreement with AMD to create a $10 billion fund to "deploy 500 megawatts of AI compute capacity over the next five years." Under the terms of the deal, HUMAIN will deal with the data center infrastructure buildout and the attendant energy requirements in Saudi Arabia, while AMD will provide its AI compute portfolio and the AMD ROCm™ open software ecosystem. The duo plan to activate their first "multi-exaflop capacity" data center in Saudi Arabia by early 2026.

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.

AMD Sells Off A $5 Billion Powerhouse: What's The Catch In This $3 Billion Deal? - Advanced Micro Devices (NASDAQ:AMD)

Advanced Micro Devices, Inc. AMD shares are trading lower on Monday after the company disclosed a definitive deal to sell its ZT Systems' U.S.-based data center infrastructure manufacturing business to Sanmina Corporation SANM for $3 billion in cash and stock. Details: Sanmina will acquire the operations for $2.25 billion in cash for assets at the target net asset value (subject to adjustments) and a $300 million premium of 50% cash and 50% equity. The inclusion of equity and a long-term contingent payment in the consideration structure is intended to further align the interests of Sanmina and AMD in connection with the establishment of their new strategic partnership. The Sanmina equity issued to AMD will be subject to a three-year lock-up period commencing upon the closing of the transaction. The transaction is anticipated to close near the end of 2025, pending regulatory approvals and customary closing conditions. As part of this deal, Sanmina will become a preferred partner for manufacturing the initial production runs (NPI) of AMD's cloud rack and cluster-scale AI solutions. AMD will retain ZT Systems' design and customer support teams to speed up the development and deployment of high-quality AMD AI systems for its cloud customers. ZT Systems currently operates with an approximate annual net revenue run rate in the range of $5 billion to $6 billion, and its future prospects appear favorable due to the introduction of new accelerated computing platforms. The company's sophisticated liquid cooling technologies and production sites in New Jersey, Texas, and the Netherlands, coupled with its worldwide supply network, enable it to offer complete end-to-end system integration, from individual parts to fully assembled racks, for the Cloud and AI infrastructure ecosystem. Forrest Norrod, executive vice president and general manager, Data Center Solutions business unit at AMD 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." As of March 29, Sanmina's cash and cash equivalents stood at $647 million. Investors can gain exposure to AMD via Direxion Daily AMD Bull 2X Shares AMUU and Amplify Video Game Leaders ETF GAMR. Price Action: AMD shares are down 1.6% at $115.29 at last check Monday. Read Next: Qualcomm Re-Enters Data Center CPU Market, Taps Nvidia Tech To Power AI Ambitions Photo: sdx15 / Shutterstock.com AMDAdvanced Micro Devices Inc$115.22-1.66%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum21.70Growth82.79Quality71.20Value15.91Price TrendShortMediumLongOverviewAMUUDirexion Daily AMD Bull 2X Shares$23.14-3.25%GAMRAmplify Video Game Leaders ETF$75.99-0.13%SANMSanmina Corp$80.00-5.39% This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Sanmina set to acquire ZT Systems for cloud, AI growth By Investing.com

SAN JOSE - Sanmina Corporation (NASDAQ: SANM), a notable player in integrated manufacturing solutions, has announced a definitive agreement to purchase the data center infrastructure manufacturing business of ZT Systems from AMD (NASDAQ: AMD). This acquisition, valued at $2.55 billion in cash and equity, along with an additional $450 million in contingent consideration, is aimed at bolstering Sanmina's presence in cloud and AI infrastructure manufacturing. AMD, currently valued at $190 billion and recognized as a prominent player in the Semiconductors industry according to InvestingPro, has maintained strong revenue growth of 21.7% over the last twelve months. The transaction, which is anticipated to be accretive to Sanmina's non-GAAP EPS in the first year following closure, will integrate ZT Systems' annual net revenue run-rate of roughly $5 - $6 billion. ZT Systems is recognized for its advanced liquid cooling capabilities and has manufacturing facilities in New Jersey, Texas, and the Netherlands. The acquisition is expected to double Sanmina's revenue scale within three years. Jure Sola, Chairman and CEO of Sanmina, stated that the acquisition positions the company as an industry leader in the cloud and AI ecosystem, enhancing its scale and deepening customer relationships. Sanmina aims to leverage ZT Systems' manufacturing expertise to provide end-to-end solutions for hyperscalers and OEM customers. Additionally, as part of the agreement, AMD will retain ZT Systems' AI systems design businesses and establish a strategic partnership with Sanmina, making it a preferred new product introduction (NPI) manufacturing partner in the U.S. This collaboration is designed to accelerate the manufacturing and deployment of AMD's AI rack and cluster-scale systems. AMD enters this partnership from a position of financial strength, with InvestingPro data showing a healthy current ratio of 2.8 and a conservative debt-to-equity ratio of 0.08, indicating strong operational flexibility. Sanmina has secured committed financing of $2.5 billion from Bank of America for the acquisition, which is unanimously approved by Sanmina's Board of Directors. The closure of the transaction is projected by the end of the 2025 calendar year, pending regulatory approvals and customary closing conditions. The strategic move is set to enhance Sanmina's capabilities across the entire product lifecycle and is expected to generate synergies through operational efficiencies. The inclusion of equity and long-term contingency in the consideration aligns the interests of Sanmina and AMD in their new partnership. For detailed analysis of AMD's financial health, market position, and growth prospects, investors can access comprehensive research reports and over 15 additional ProTips through InvestingPro's extensive coverage of major semiconductor companies. The announcement was made in conjunction with a conference call hosted by Sanmina today, where further details were discussed. This news is based on a press release statement from Sanmina Corporation. In other recent news, Advanced Micro Devices, Inc. (AMD) has announced a significant $6 billion share repurchase program, reflecting its strong financial position and commitment to returning value to shareholders. This new buyback plan supplements the $4 billion remaining from a previous authorization, bringing AMD's total repurchase capacity to an estimated $10 billion. Furthermore, AMD has partnered with Saudi Arabia's HUMAIN on a $10 billion AI infrastructure project, aiming to deploy 500 megawatts of AI compute capacity by 2026. This collaboration is expected to enhance AMD's AI initiatives significantly. Analyst firms have also weighed in on AMD's prospects. Mizuho Securities raised its price target for AMD to $135, citing the company's AI advancements and strategic partnerships as key growth drivers. Mizuho maintained an Outperform rating, emphasizing AMD's robust product pipeline, including the upcoming MI355x products. Evercore ISI also maintained an Outperform rating with a $126 price target, highlighting AMD's consistent strategy in the datacenter GPU market, which mirrors its successful server CPU approach. In the microprocessor market, AMD experienced a slight decline in market share, dropping by 99 basis points to 21.1%, according to Mercury Research estimates. Despite this, AMD's management remains confident in its long-term strategy, focusing on gradual market share growth across various segments. These developments underscore AMD's strategic focus and financial strategies as it navigates the competitive semiconductor industry.

AMD to sell ZT Systems' server-manufacturing business to Sanmina in $3 billion deal

(Reuters) -AMD will sell the server-manufacturing business of recently acquired ZT Systems to Sanmina in a $3 billion deal, making the U.S.-based contract manufacturer its partner for building AI hardware as the chip designer works to onshore supply chains. The deal, announced on Monday, highlights AMD's efforts to produce more of its chips on American soil amid global trade tensions and U.S. President Donald Trump's efforts to expand domestic semiconductor manufacturing. AMD shares were down 2.2%, while Sanmina fell more than 5%. "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 of AMD's data center solutions business unit. The company had said last month its key central processor chips would soon be made at TSMC's new production site in Arizona -- marking the first time its products will be manufactured in the U.S. AMD had announced a $4.9 billion buyout of ZT Systems in 2024 and unveiled plans to sell its server manufacturing business once the transaction closes. The deal was completed in March. Under Monday's agreement, AMD will retain ZT's AI systems design business -- a key asset amid escalating computing requirements that require mapping out thousands of chips strung together in clusters. ZT's design unit could be an important portfolio item for AMD, which has been struggling to compete against Nvidia in the booming market for AI processors. Sanmina will pay $2.25 billion in cash for ZT Systems' manufacturing business, along with a $300 million premium consisting of 50% cash and 50% equity. The deal, expected to close near the end of this year, also includes a $450 million contingent consideration based on the business' financial performance over the next three years. AMD is entitled to receive up to $153 million, if the deal is terminated. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar)