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

In a strategic move to refine its focus on AI and cloud infrastructure, semiconductor leader AMD has completed the sale of ZT Systems’ server-manufacturing business to Sanmina, an electronic manufacturing services company. The $3 billion transaction, consisting of cash, stock, and contingent payments, marks a significant step in AMD’s broader plan following its acquisition of ZT Systems in March 2025.

The deal structure includes $2.25 billion in cash, a $300 million premium split evenly between cash and equity, and up to $450 million in contingent payments based on ZT Systems’ financial performance over the next three years. This divestiture aligns with AMD’s original intent announced during its $4.9 billion acquisition of ZT Systems in August 2024, where AMD planned to retain the AI and cloud infrastructure design business but spin off the server manufacturing segment.

Post-sale, AMD will continue to control ZT Systems’ rack-scale AI solutions design business, reinforcing its commitment to advancing AI technologies. Meanwhile, Sanmina will become AMD’s preferred partner for new product introduction manufacturing related to cloud rack and cluster-scale AI solutions. This partnership is expected to bolster U.S.-based manufacturing capabilities, improve quality, and accelerate time-to-market for AMD’s cloud customers.

Forrest Norrod, Executive Vice President and General Manager of AMD’s Data Center Solutions Business Unit, emphasized that combining AMD’s AI systems design expertise with Sanmina’s manufacturing experience will strengthen domestic production of rack and cluster-scale AI systems. This collaboration is poised to enhance AMD’s competitive edge in the rapidly evolving AI and cloud infrastructure markets.

Broader Implications for Cloud Infrastructure and AI Manufacturing

This transaction highlights a growing trend among semiconductor companies to streamline operations by focusing on core competencies such as AI system design while outsourcing manufacturing to specialized partners. By divesting the server manufacturing business, AMD can allocate more resources to innovation in AI and cloud infrastructure, critical areas for future growth and competitive advantage.

For cloud service providers and enterprises, this means faster access to cutting-edge AI hardware solutions designed by AMD, supported by efficient manufacturing from Sanmina. The partnership also underscores the importance of maintaining robust U.S.-based manufacturing capabilities amid global supply chain uncertainties, ensuring reliability and quality for critical AI infrastructure components.

This deal sets a precedent for how semiconductor firms can collaborate with manufacturing specialists to accelerate innovation cycles and meet the growing demand for AI and cloud infrastructure solutions worldwide.