Semiconductor giant AMD followed through with its plan to spin out ZT Systems’ server-manufacturing business.
AMD announced on Monday that it was selling ZT Systems’ server-manufacturing business to electronic manufacturing services company Sanmina. The $3 billion deal is a mix of cash and stock: $2.25 billion in cash; a $300 million premium, including 50% cash and 50% equity; and a $450 million contingent payment based on financial performance over the next three years, according to Reuters.
The deal is expected to close by the end of 2025, subject to regulatory approval. After this divestiture, AMD will maintain control of ZT Systems’ rack-scale AI solutions design business.
This announcement isn’t a shock. When AMD announced its intent to acquire ZT Systems, an AI and cloud infrastructure company, for $4.9 billion in August 2024, the company said at the time that it planned to divest that part of ZT Systems’ business after the deal formally closed. AMD’s acquisition of ZT Systems officially closed in March 2025, according to Reuters.
Alongside this announcement, AMD said that Sanmina will become a “preferred” new product introduction manufacturing partner for AMD cloud rack and cluster-scale AI solutions.
“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,” said Forrest Norrod, executive vice president and general manager, data center solutions business unit at AMD, in the company’s announcement.
TechCrunch reached out to AMD for comment.