AMD Offloads ZT Systems’ Data Center Infra Manufacturing Business To Sanmina For $3B, Retains AI Design Team

Advanced Micro Devices (AMD) said Monday it will sell ZT Systems' data center infrastructure manufacturing business to Sanmina for $3 billion in cash and stock while retaining ZT’s design and customer support teams to bolster its AI and cloud computing push.

Sanmina will become AMD’s preferred manufacturing partner for new product introductions, overseeing early-stage production of rack- and cluster-scale systems tailored for artificial intelligence workloads. 

The deal includes a contingent payment of up to $450 million based on future performance. The transaction is expected to close near the end of 2025, pending regulatory approval.

ZT Systems, a U.S.-based data center infrastructure company, was acquired by AMD in 2024. At the time, AMD indicated it would seek a strategic buyer for ZT’s manufacturing business. 

“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 quality and time-to-market for our cloud customers,” said Forrest Norrod, executive vice president of AMD’s Data Center Solutions unit.

Sanmina, a global leader in electronics manufacturing, brings liquid cooling expertise, cloud infrastructure know-how, and the ability to scale manufacturing quickly, which are key for AI systems. CEO Jure Sola said the acquisition complements the company’s global portfolio and enhances its role in the AI supply chain.

AMD’s stock slipped 1.6% in pre-market trading on Monday. The shares are down more than 15% this year and have fallen over 4% in the past 12 months.

Last week, AMD’s board authorized a $6 billion share buyback program. The company posted better-than-expected first-quarter (Q1) results and forecasted revenue of $7.4 billion in the second quarter (Q2). 

However, it warned that gross margins would be hit by an $800 million charge linked to U.S. export controls on AI chips to China, part of a projected $1.5 billion annual revenue impact.

The earnings drew mixed reactions from Wall Street. The average price target is $127.19, according to Koyfin, implying 8.5% upside from Friday’s close.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read also: Qualcomm Targets Data Center CPUs With Nvidia Integration – Eyes Market Dominated by Intel, AMD