Advanced Micro Devices, Inc. (NASDAQ:AMD) has completed the sale of ZT Systems' U.S.-based data center infrastructure manufacturing business to Sanmina Corp (NASDAQ:SANM).
Under the agreement, AMD will retain ZT Systems' top-tier design and customer enablement teams to accelerate the development and deployment of AMD-powered AI systems for cloud clients.
In turn, Sanmina will serve as AMD's preferred U.S.-based manufacturing partner for new product introductions across cloud rack and large-scale AI infrastructure solutions.
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The acquisition adds ZT Systems' state-of-the-art facilities in New Jersey, Texas and the Netherlands to Sanmina's global footprint, significantly increasing its capacity and technical expertise.
Sanmina aims to capitalize on surging demand for high-performance, mission-critical data center technologies.
AMD decided to divest ZT Systems' data center manufacturing operations to streamline its business and stay focused on its core GPU and AI processor roadmap.
The move followed AMD's $4.9 billion acquisition of ZT Systems in 2024, which added about $10 billion in annual revenue but left AMD managing large-scale manufacturing operations — a model that risked competing with its own customers, including Dell Technologies Inc (NYSE:DELL) and Hewlett Packard Enterprise Co (NYSE:HPE).
By offloading ZT's production assets—valued between $3 billion and $4 billion, according to Bloomberg—AMD aimed to avoid direct competition with partners, reduce operational complexity, and refocus on high-margin chip design.
Several Taiwanese manufacturers, including Compal Electronics, Inventec, Pegatron, and Wistron, reportedly expressed interest in the assets, which include plants in New Jersey and Texas.
The decision came as AMD worked to reassert its competitive edge against Nvidia Corp (NASDAQ:NVDA).
AMD stock gained over 109% year-to-date, driven by the AI frenzy, including a chip deal with OpenAI.
AMD Price Action: Advanced Micro Devices shares were up 0.47% at $254.24 at the time of publication on Monday.
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