AMD has officially announced its decision to divest the server-manufacturing arm of ZT Systems to Sanmina in a significant deal valued at $3 billion. This transaction comprises $2.25 billion in cash, alongside a $300 million premium split evenly between cash and equity. Additionally, a contingent payment amounting to $450 million is included, dependent on ZT Systems’ financial performance over the next three years.
The deal, anticipated to conclude by the end of 2025, is contingent upon regulatory approvals. Post-divestment, AMD will retain control over ZT Systems’ rack-scale AI solutions design business. This move is in line with AMD’s earlier strategy announced during its $4.9 billion acquisition of ZT Systems in August 2024, which included plans to sell off part of ZT’s operations once the acquisition was finalised. The acquisition closure occurred in March 2025.
In conjunction with this announcement, AMD designated Sanmina as a preferred partner for new product introduction manufacturing, particularly for cloud rack and cluster-scale AI solutions. Forrest Norrod, AMD’s executive vice president and general manager of the data centre solutions business, stated that leveraging the expertise of its AI systems design team alongside Sanmina will enhance AMD’s manufacturing capabilities in the U.S. This collaboration aims to improve both quality and speed to market for AMD’s cloud customers.
Overall, this move by AMD is part of its broader strategy to streamline operations and focus on its strengths in AI and cloud infrastructure, ensuring a robust future in these competitive sectors.
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