AMD finalizes divestiture of ZT Systems manufacturing to Sanmina

SANTA CLARA, Calif. - AMD (NASDAQ:AMD), a prominent semiconductor player with a market capitalization of $410 billion and currently trading near its 52-week high, announced Monday it has completed the agreement to divest ZT Systems’ data center infrastructure manufacturing business to Sanmina (NASDAQ:SANM), while retaining ZT Systems’ design and customer enablement teams. According to InvestingPro analysis, AMD shows strong momentum with a 141% return over the past six months.

The transaction establishes Sanmina as a preferred manufacturing partner for AMD’s cloud rack and cluster-scale AI solutions. AMD will maintain the design expertise from ZT Systems to support faster deployment of its AI systems for cloud customers.

"Rack-scale innovation marks the next chapter in the AMD data center strategy," said Forrest Norrod, executive vice president and general manager of AMD’s Data Center Solutions business unit. "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."

The strategic partnership aims to combine U.S.-based manufacturing capabilities with AMD’s AI systems design expertise to improve quality and accelerate time-to-market for customers.

This move aligns with AMD’s broader strategy to strengthen its position in the data center and AI markets by expanding beyond chip design into full-system solutions while working with manufacturing partners.

The financial terms of the transaction were not disclosed in the company’s press release statement.

In other recent news, Sanmina Corporation has completed its acquisition of ZT Systems’ data center infrastructure manufacturing business from AMD ahead of schedule. This acquisition strengthens Sanmina’s position in the cloud and AI infrastructure market, and a strategic partnership has been formed where Sanmina will be a preferred manufacturing partner for AMD’s cloud rack and AI solutions. UBS has maintained its Buy rating on AMD with a price target of $265, citing potential upside in AMD’s third-quarter results, particularly in the data center and CPU segments. UBS anticipates AMD’s Q3 revenue could reach the high end of the $9 billion guidance, with data center GPU revenue projected at approximately $1.7 billion.

Additionally, IBM has successfully run a quantum computing algorithm on standard AMD chips, marking progress toward making quantum computers commercially viable. Meanwhile, Bernstein has reiterated its Market Perform rating on AMD with a $200 price target, noting the strategic importance of AMD’s recent move with OpenAI. Cantor Fitzgerald has raised its price target for Intel to $45 from $24.80 while maintaining a Neutral rating, highlighting a previous "Tactical Long" position on the stock. These developments reflect ongoing strategic shifts and market expectations for AMD and its industry peers.

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