Billion-euro deal: AMD sells ZT Systems' server business to Sanmina

The Californian chip company AMD will sell the US-based data center infrastructure division of the recently acquired US server integrator ZT Systems to the US contract manufacturer Sanmina. This was announced by AMD on Monday. As part of the transaction, Sanmina will become a preferred manufacturing partner for new product introduction (NPI) for AMD's cloud rack and cluster-scale AI solutions, according to the company's announcement.

Sanmina will acquire AMD's manufacturing business for $3 billion in cash and stock, including a contingent payment of up to $450 million based on the company's financial performance over the next three years. The transaction is expected to close by the end of this year, subject to regulatory approval.

Strengthening manufacturing in the USA

“By combining the deep experience of our AI system 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 unit, in the company's announcement. He added: “ZT Systems' manufacturing division and its team of experts remain a significant and strategic partner for AMD.”

The deal underlines AMD's efforts to produce more of its chips on US soil, not least against the backdrop of increasing global trade conflicts and US President Donald Trump's efforts to expand US semiconductor production, according to the Reuters news agency. AMD had already announced in mid-April that its most important central processor chips would soon be manufactured in TSMC's new semiconductor plant in the US state of Arizona 4811957.

ZT Systems takeover only recently completed

AMD announced the acquisition of ZT Systems for 4.9 billion US dollars last summer. At the time, it was said that the company wanted to find a third-party buyer for the “Data Center Infrastructure Manufacturing Business”. The acquisition of ZT Systems was completed at the end of March. Last year, AMD also acquired the Finnish company Silo AI for 665 million US dollars, which trains its large language models (LLMs), among other things. AMD described the acquisition as a “significant step” for its AI strategy. Silo AI is intended to help with AMD's software support, for example – where it lags well behind the global market leader Nvidia.

As part of the agreement reached on Monday, AMD will retain control of ZT Systems' rack-scale AI solutions design business. “ZT's design unit could be an important part of AMD's portfolio as it struggles to compete with Nvidia in the booming AI processor market,” writes Reuters.

(akn)