The company is concluding a strategic operation to focus on designing and supporting Artificial Intelligence solutions while making Sanmina its primary manufacturing partner.
In a move that redefines its approach to data center infrastructure, AMD has announced the sale of ZT Systems, its hardware manufacturing business for data centers, to multinational Sanmina for up to $3 billion, in a transaction that includes cash, stock, and potential contingent payments. This move does not imply a withdrawal from the sector, but rather a strategic shift: Lisa Su’s company will keep the AI system design team under its wing while delegating assembly and manufacturing to a trusted partner.
A sale that is also an industrial alliance
The operation is reminiscent of its previous spin-off of the chip manufacturing business with GlobalFoundries. In this case, AMD acquires what it finds valuable—specialized talent in cloud and AI solutions—and outsources the rest to an industrial partner. Sanmina not only acquires the production facilities of ZT Systems but also becomes AMD’s preferred partner for manufacturing cloud AI solutions.
AMD’s executive vice president, Forrest Norrod, explained the rationale behind the agreement:
“By combining the extensive experience of our AI systems design team with our new alliance with Sanmina, we expect to accelerate the delivery of high-quality solutions for cloud data centers, reinforcing manufacturing capabilities in the U.S.”
AMD retains what matters: design and innovation
The move shows that AMD’s true bet lies in added value: system design, cloud customer support, and architecture optimization for large-scale AI deployments. By selling the physical part of the business, AMD reduces its exposure to operational and logistical risks while securing an industrial partner with proven advanced manufacturing capabilities, including liquid cooling and precision assembly, essential in new data centers.
Sanmina, for its part, emerges strengthened as a strategic supplier in the AI market, securing a client like AMD at the heart of AI cluster innovation, and adding new capabilities to its portfolio to address the growing demand for generative infrastructure.
$3 billion… and up to $450 million more
The sale includes an initial payment of up to $3 billion in cash and stock. Additionally, there is a potential payment of up to $450 million if certain post-sale goals are met. While complete financial details have yet to be disclosed, the transaction is expected to close by late 2025, during which both companies will work on transitioning assets and personnel.
AI and open ecosystems, the new DNA of AMD
AMD’s strategy reflects a clear vision: it is not looking to build every server or operate every data center, but rather to be the technology partner that provides the design, stack, and customization capabilities for cloud companies leading the surge in artificial intelligence.
From integrating with architectures like Instinct MI300X to supporting custom clusters with network and liquid cooling technologies, AMD aims to establish itself as the open and interoperable partner for the new era of accelerated computing.
At a time when the race for AI defines global technological leadership, outsourcing manufacturing while focusing on design and differentiation seems like a masterstroke. AMD sheds operational weight, gains agility, and partners with an industrial giant without losing control over the strategic value of its offering.
With this move, AMD strengthens its presence in the cloud without shouldering the physical burden. And Sanmina, with AMD as a priority customer, positions itself at the forefront of data center manufacturing for AI. All indications suggest that the real battle will not be so much about who manufactures more, but rather about who designs better and delivers faster.
Source: AMD