Sanmina Bets $2.55B on AI Boom with AMD Data Center Deal
Acquisition of AMD's ZT Systems manufacturing assets positions Sanmina as a key U.S. partner in the high-growth AI infrastructure supply chain.
Sanmina Corporation (NASDAQ: SANM) is making a significant move into the heart of the artificial intelligence revolution, announcing a definitive agreement to acquire the data center infrastructure manufacturing business of ZT Systems from Advanced Micro Devices (AMD) for $2.55 billion.
The deal, unveiled Monday, fundamentally reshapes Sanmina's position in the technology landscape, transforming it into a critical U.S.-based manufacturing partner for the booming AI and cloud computing markets. In addition to the initial cash and equity payment, the transaction includes up to $450 million in contingent consideration based on future financial performance, potentially bringing the total value to $3 billion.
This strategic acquisition provides Sanmina with advanced manufacturing capacity and key expertise in specialized technologies, including high-demand liquid cooling solutions essential for managing the heat generated by powerful AI processors. The deal encompasses ZT Systems' manufacturing facilities in New Jersey, Texas, and the Netherlands, significantly expanding Sanmina’s global footprint.
"The acquisition of ZT Systems' manufacturing operations positions Sanmina as an industry leader in the Cloud and AI ecosystem and enables us to further capitalize on the significant growth opportunity of this market," said Jure Sola, Chairman and CEO of Sanmina, in the official company announcement. "Combining Sanmina's global expertise and vertical integration capabilities with ZT Systems' high-quality manufacturing capacity... will give us enhanced scale and deepen our customer relationships."
For AMD, the divestiture sharpens its focus on its core business of designing high-performance chips, while securing a vital manufacturing ally. The agreement establishes Sanmina as a preferred U.S.-based partner for new product introductions, a move aimed at accelerating the deployment of AMD's rack and cluster-scale AI systems for data centers.
Forrest Norrod, Executive Vice President and General Manager of AMD's Data Center Solutions business, commented on the partnership, stating, "This agreement will help accelerate the U.S.-based manufacturing of AMD AI end-to-end training and inference solutions... Together, we will accelerate time-to-market and set the standard for quality and flexibility to benefit the entire AI ecosystem."
Investors are watching the strategic pivot closely. Sanmina, with a market capitalization of over $7 billion, has seen its stock perform strongly over the past year. Shares of SANM traded at $133.77 in morning trading Monday. The deal is expected to be accretive to Sanmina's non-GAAP earnings per share within the first year after closing, a key metric for shareholders.
Wall Street has shown early optimism for Sanmina's deeper integration into the AI supply chain. Recent analyst reports preceding the official announcement had already raised price targets on the stock, citing the company's growing role in AI data center hardware.
Sanmina has secured $2.5 billion in committed financing from Bank of America to fund the transaction. The deal is slated to close near the end of the 2025 calendar year, subject to regulatory approvals and other standard closing conditions. As part of the agreement, the Sanmina equity issued to AMD will be subject to a three-year lock-up period, signaling a long-term commitment between the two technology firms.