Dive Brief:
- Manufacturing solutions company Sanmina announced Monday that it plans to acquire ZT Systems' data center infrastructure manufacturing business from Advanced Micro Devices for up to $3 billion.
- Sanmina will pay AMD $2.55 billion in cash for the business, as well as a $450 million contingent consideration. AMD will retain ownership of ZT Systems' AI systems design businesses.
- The deal, which will give Sanmina a larger stake in the cloud and AI market, is expected to close by the end of the year.
Dive Insight:
Data center infrastructure production has emerged as a lucrative corner of the domestic manufacturing market.
Companies including Carrier, Schneider Electric and Vertiv are among those investing billions of dollars in data center infrastructure, ranging from heating and cooling systems to electric grid solutions.
The deal will give Sanmina a bigger foothold in the market through ZT Systems' server manufacturing systems. The company, which earned $7.57 billion in revenue in 2024, expects to double that number in three years as a result of the acquisition.
AMD will now serve as Sanmina's manufacturing partner on the deployment of AMD's AI rack and cluster-scale systems for cloud customers.
ZT Systems brings to the deal its manufacturing facilities in New Jersey and Texas, adding to Sanmina's 13 locations across the U.S.
AMD's divestment of ZT Systems' data center infrastructure manufacturing business was part of its strategy when it first announced plans last August to acquire the company for $4.9 billion. The semiconductor company closed on its acquisition of ZT Systems in March.
"ZT Systems’ liquid cooling capabilities, high-quality manufacturing capacity and significant cloud and AI infrastructure experience are the perfect complement to Sanmina’s global portfolio, mission-critical technologies and vertical integration capabilities,” Sanmina CEO and Chairman Jure Sola said in a statement.
