(Reuters) -AMD will promote the server-manufacturing enterprise of not too long ago acquired ZT Methods to Sanmina in a $3 billion deal, making the U.S.-based contract producer its accomplice for constructing AI {hardware} because the chip designer works to onshore provide chains.
The deal, introduced on Monday, highlights AMD’s efforts to provide extra of its chips on American soil amid international commerce tensions and U.S. President Donald Trump’s efforts to develop home semiconductor manufacturing.
AMD shares have been down 2.2%, whereas Sanmina fell greater than 5%.
“We anticipate to strengthen our U.S.-based manufacturing capabilities for rack and cluster-scale AI techniques and speed up high quality and time-to-market for our cloud clients,” stated Forrest Norrod, government vp of AMD’s knowledge middle options enterprise unit.
The corporate had stated final month its key central processor chips would quickly be made at TSMC’s new manufacturing web site in Arizona — marking the primary time its merchandise will likely be manufactured within the U.S.
AMD had introduced a $4.9 billion buyout of ZT Methods in 2024 and unveiled plans to promote its server manufacturing enterprise as soon as the transaction closes. The deal was accomplished in March.
Beneath Monday’s settlement, AMD will retain ZT’s AI techniques design enterprise — a key asset amid escalating computing necessities that require mapping out hundreds of chips strung collectively in clusters.
ZT’s design unit may very well be an essential portfolio merchandise for AMD, which has been struggling to compete in opposition to Nvidia within the booming marketplace for AI processors.
Sanmina pays $2.25 billion in money for ZT Methods’ manufacturing enterprise, together with a $300 million premium consisting of fifty% money and 50% fairness.
The deal, anticipated to shut close to the tip of this 12 months, additionally features a $450 million contingent consideration primarily based on the enterprise’ monetary efficiency over the subsequent three years.
AMD is entitled to obtain as much as $153 million, if the deal is terminated.
(Reporting by Arsheeya Bajwa in Bengaluru; Modifying by Shilpi Majumdar)
