AMD sells ZT Systems' data center business to Sanmina for $3 billion

AMD has announced a definitive agreement to divest ZT Systems’ U.S.-based data center infrastructure manufacturing operations to Sanmina for $3 billion in cash and stock. The deal includes a contingent payment of up to $450 million, subject to regulatory approvals and customary closing conditions, with anticipated completion by the end of 2025.

Transaction Details

Under the terms of the agreement, Sanmina is designated as a preferred new product introduction (NPI) manufacturing partner for AMD’s Artificial Intelligence (AI) solutions, focusing on cloud rack and cluster-scale offerings. AMD is set to retain ZT Systems’ design and customer enablement teams to improve quality and deployment timelines for its AI systems.

Statements from Leadership

Forrest Norrod, AMD's executive vice president and general manager of Data Center Solutions, indicated that the partnership is expected to enhance U.S.-based manufacturing capabilities while improving quality for cloud customers. Sanmina aims to leverage ZT Systems’ expertise in liquid cooling and its background in cloud and AI infrastructure.

Jure Sola, CEO of Sanmina, emphasized the expected competitive advantages of integrating ZT Systems into their operations, highlighting the importance of ongoing collaboration with AMD in their strategic plans.

Advisors Involved

Morgan Stanley & Co. LLC is acting as the exclusive financial advisor to AMD, while Latham & Watkins LLP serves as the legal advisor pertaining to the transaction.

This summary reflects a timely overview of AMD's agreement with Sanmina regarding ZT Systems, relevant for enterprise IT leaders and decision-makers in the data center space.