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Recently, AMD announced that it has reached a final agreement with Sanmina, an American integrated manufacturing solutions company, to sell the data center infrastructure manufacturing business of its wholly-owned subsidiary ZT Systems ina $3 billion cash and stock portfolio. The transaction is expected to be completed in the fourth quarter of 2025 and is subject to regulatory approval and compliance with other customary conditions.

Core terms of the transaction: $2.25 billion in cash + $300 million in premium + $450 million in contingent consideration

According to the agreement, Sanmina will pay $2.25 billion in cash and assume a $300 million premium (50% in cash and 50% in equity), while providing up to $450 million in contingent consideration. The specific amount will be dynamically adjusted based on the financial performance of the business over the next three years. This transaction marks AMD's rapid advancement of its strategic adjustment of "divesting the manufacturing process and focusing on the AI full-stack platform" since its acquisition of ZT Systems for $4.9 billion in cash and stocks in August 2024.

Strategic intent: Light-asset transformation and AI ecosystem closure

Forrest Norrod, Executive Vice President of AMD and General Manager of the Data Center Solutions Business Unit, said: "This collaboration will enable AMD to accelerate the delivery of the 'CPU+GPU+ software architecture' AI developer full-stack platform with a more flexible operating model." By divesting low-margin and high-capital-intensity manufacturing businesses, AMD can focus its resources on high-value-added areas such as the MI300 series AI GPU, EPYC CPU, and ROCm/AI development toolchain, while reducing the pressure of fixed asset depreciation.

Sanmina takes over: Deep integration of liquid cooling technology with the global manufacturing network

Jure Sola, the chairman and CEO of Sanmina, emphasized that the liquid cooling technology capabilities of ZT Systems complement Sanmina's global manufacturing network. As part of the transaction, Sanmina will become the preferred New Product Introduction (NPI) partner for AMD's cloud rack-level and cluster AI solutions, responsible for hyperscale rack and machine manufacturing, global logistics, and on-site installation. Sanmina's mature supply chain system can shorten the delivery cycle and avoid supply chain risks brought about by international trade policies.

AMD's strategic focus: From hardware manufacturing to the full-stack AI ecosystem

This transaction is a milestone in AMD's "light asset + software and hardware integration" strategy. In August 2024, AMD acquired ZT Systems for $4.9 billion in cash and stocks, but explicitly stated that it would spin off its manufacturing division. Through this sale, AMD can reduce the depreciation of fixed assets and reinvest capital in high-margin and high-technology-barrier core businesses such as the MI300 series high-performance AI Gpus, EPYC cpus, and the ROCm/AI development toolchain.

Forrest Norrod, Executive Vice President of AMD and General Manager of the Data Center Solutions Business Unit, said that this transaction is a key move in AMD's "light asset + software and hardware integration" strategy. By divesting low-margin and high-capital-intensity manufacturing businesses, AMD can focus its resources on core businesses such as the MI300 series high-performance AI GPU, EPYC CPU, and ROCm/AI development toolchain, accelerating the construction of a full-stack AI developer platform featuring "CPU+GPU+ software architecture". Retaining the design and customer teams of ZT Systems will help AMD shorten the quality control and deployment cycle of cloud AI applications.

Jure Sola, Chairman and CEO of Sanmina, said that ZT Systems' liquid cooling capabilities and high-quality manufacturing processes will complement Sanmina's global technology portfolio. Both sides will jointly promote the quality and flexibility standards of the AI ecosystem. Sanmina's mature hardware manufacturing network system can shorten the delivery cycle and avoid the risks of international trade policies, which is in line with the manufacturing transfer requirements under the latest trade agreement of the Trump administration.

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