In selling the manufacturing unit of ZT Systems to Sanmina for $3 billion, AMD is making the U.S. electronics services giant a new product introduction manufacturing partner for its cloud rack and cluster-scale AI solutions in the chip designer’s fight against Nvidia.
AMD has made U.S. electronics services giant Sanmina a new product introduction manufacturing partner for its cloud rack and cluster-scale AI solutions after selling its ZT Systems manufacturing business to the partner company.
The Santa Clara, Calif.-based chip designer said Monday that it closed the $3 billion divestiture of ZT Systems’ manufacturing unit to Sanmina but will retain ZT Systems’ rack-scale AI solutions design and customer enablement teams.
[Related: AMD’s OpenAI Deal A ‘Major Validation Moment’ For Chip Designer: Analyst]
The $3 billion transaction consists of cash and Sanmina common stock, which includes a contingent payment of up to $450 million, according to AMD.
These moves are part of AMD’s original plan when the company announced last year that it was acquiring ZT Systems, a Secaucus, N.J.-based server designer and manufacturer, for $4.9 billion. AMD completed its acquisition of ZT Systems in March.
AMD made the acquisition to mount a larger challenge against Nvidia’s dominance of the AI infrastructure market, previously saying that ZT Systems would give it “world-class systems design and rack-scale solutions expertise” to “significantly strengthen our data center AI systems and customer enablement capabilities.”
“By extending our leadership from silicon to software to full systems, we’re giving cloud and AI customers an open, scalable path to deploy AMD performance faster than ever,” Forrest Norrod, head of AMD’s Data Center Solutions business unit, said in a Monday statement.
“Our strategic partnership with Sanmina brings U.S.-based manufacturing strength together with AMD AI systems design and enablement expertise to deliver quality, speed and flexibility at scale,” he added.
According to a CRN analysis earlier this month, the ZT Systems acquisition played a critical role in helping AMD win its flagship deal to deploy six gigawatts of Instinct GPU-based rack-scale infrastructure for AI software giant OpenAI.
The OpenAI deal is expected to bring in tens of billions of dollars in revenue for AMD, the company’s CEO, Lisa Su, said at the time. She also predicted that the big customer win will have a “compounding effect” that could result in AMD making “well over $100 billion in revenue over the next few years” from other customers deploying Instinct infrastructure.
Based in San Jose, Calif., Sanmina employs about 34,000 people across 21 countries on four continents. As an integrated manufacturing provider, the company serves the “fastest-growing segments of global electronics manufacturing services” and offers “end-to-end design, manufacturing, logistics and repair solutions for OEMs across a variety of industries,” AMD has previously said.
