AMD to sell ZT Systems' server-manufacturing business to Sanmina in $3 billion deal
AMD has agreed to sell the server-manufacturing business of recently acquired ZT Systems to Sanmina in a $3 billion deal, making the contract manufacturer its partner for building AI systems as the chipmaker works to onshore supply chains.
AMD had announced a $4.9 billion buyout of ZT Systems last year and unveiled plans to break off its server manufacturing business and sell it once the transaction closes. The deal was completed in March.
Under the agreement announced on Monday, AMD will retain ZT's AI systems design businesses and will work with Sanmina as a U.S.-based manufacturing partner for its AI data center business. Shares of AMD were down 2.7 per cent in premarket trading.
"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," Forrest Norrod, executive vice president of AMD's data center solutions business unit, said in a statement.
AMD has already taken steps to produce more of its chips on American soil amid global trade tensions and U.S. President Donald Trump's efforts to expand domestic semiconductor manufacturing.
The company had said last month its key processor chips would soon be made at TSMC's new production site in Arizona — the first time its products will be manufactured in the United States.
Sanmina will pay $2.25 billion in cash for ZT Systems' data center infrastructure manufacturing business, along with $300 million premium consisting of 50 per cent cash and 50 per cent equity.
The deal, expected to close near the end of this year, also includes a $450 million contingent consideration based on financial performance of the business over the next three years.
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While the initial blockchain hype has faded, the technology has found a practical niche in areas like asset tokenisation within financial markets. This allows assets like real estate or company shares to be represented by digital tokens on the blockchain, enabling easier, faster and cheaper trading. The same pattern can be expected with generative AI. The current AI hype cycle appears to be tapering off, and the consequences of rushed or poorly thought-out implementations will likely become more visible in the coming years. However, this decline in hype doesn't signal the end of generative AI's relevance. Rather, it marks the beginning of a more grounded phase where the technology can find the most suitable applications. One of the clearest takeaways so far is that AI should be used to enhance human productivity, not replace it. From people pushing back against the use of AI to replace them, to AI making frequent and costly mistakes, human oversight paired with AI-enhanced productivity is increasingly seen as the most likely path forward. Recognising the patterns of tech hype is essential for making smarter decisions. Instead of rushing to adopt every new innovation based on inflated promises, a measured, problem-driven approach leads to more meaningful outcomes. Long-term success comes from thoughtful experimentation, implementation and clear purpose, not from chasing trends or short-term gains. Hype should never dictate strategy; real value lies in solving real problems.
