AMD has also recently completed their $3 billion acquisition of ZT Systems’ server-manufacturing business. This merger features a combination of cash and stock. It is poised to make AMD more competitive in its manufacturing capabilities and cement its place in the technology arms race.
The deal comprises $2.25 billion in cash. Moreover, it includes a $300 million premium that is 50% cash and 50% equity. The agreement features a contingent upfront payment of $450 million. This payment is contingent on the overall financial success of ZT Systems in the coming three years. The close on this transaction is expected by the end of 2025, subject to regulatory approval.
Not just AMD, though Reuters reported that the deal includes contract manufacturer Sanmina, a long-time preferred NPI partner of AMD’s. The partnership is aimed at strengthening U.S.-based manufacturing capabilities, including the production of rack and cluster-scale AI systems.
Forrest Norrod, executive vice president and general manager of AMD’s data center solutions business unit, expressed optimism about the deal.
“By combining the deep experience of our AI systems design team with our new preferred NPI partnership with Sanmina, we expect to strengthen our U.S-based manufacturing capabilities for rack and cluster-scale AI systems and accelerate quality and time-to-market for our cloud customers,” – Forrest Norrod.
Those financial performance metrics will determine whether or not the $450 million contingent payment is realized. This speaks to AMD’s deep commitment to enhance operational efficiency and meet the exponential demands of the cloud computing industry. This acquisition marks a critical move for AMD as it looks to diversify its product portfolio and make advancements in manufacturing.
With this acquisition, AMD sets itself up to be a stronger competitor in the fast-paced tech landscape. The acquisition aligns with AMD’s long-term vision. The effort is to combine cutting-edge technologies and accelerate new product development capabilities, helping the company remain first-to-market with new innovations.