AMD Spins Out ZT Systems’ Server-Manufacturing Business to Sanmina in $3 Billion Deal
AMD, the semiconductor giant, has successfully followed through with its plan to spin out ZT Systems’ server-manufacturing business. The company announced on Monday that it has reached an agreement to sell this division to electronic manufacturing services company Sanmina in a deal worth $3 billion.
The deal consists of $2.25 billion in cash, a $300 million premium (50% cash and 50% equity), and a $450 million contingent payment based on financial performance over the next three years. This strategic move is expected to strengthen AMD’s position in the market and enhance its focus on core business operations.
The transaction is anticipated to close by the end of 2025, pending regulatory approval. Following the divestiture, AMD will retain control of ZT Systems’ rack-scale AI solutions design business, aligning with its long-term growth strategy.
AMD’s decision to divest ZT Systems’ server-manufacturing business was part of its initial plan when it announced the acquisition of ZT Systems in August 2024 for $4.9 billion. The acquisition was officially finalized in March 2025, marking a significant milestone for both companies.
In addition to the divestiture, AMD also revealed that Sanmina will become a “preferred” new product introduction manufacturing partner for AMD’s cloud rack and cluster-scale AI solutions. This partnership is expected to enhance manufacturing capabilities and accelerate product development for cloud customers.
Forrest Norrod, Executive Vice President and General Manager of the data center solutions business unit at AMD, expressed optimism about the collaboration with Sanmina. He stated, “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 for rack and cluster-scale AI systems and accelerate quality and time-to-market for our cloud customers.”
As the industry continues to evolve, strategic partnerships and divestitures play a crucial role in shaping the future of technology companies. With AMD’s latest move to spin out ZT Systems’ server-manufacturing business, the company is well-positioned to drive innovation and deliver cutting-edge solutions to its customers.
JS has reached out to AMD for further insights on this development.
