Peter Smith
● AMD just closed the sale of its ZT Systems data center business to Sanmina Corporation in October 2025, catching many by surprise. The deal wrapped up nearly a year earlier than AMD's CFO had indicated during the last earnings call, when completion wasn't expected until late 2026.
● Twitter user Nikolias Goninus brought attention to the news, noting that AMD has shed a capital-heavy segment of its operations. The sale transfers ZT Systems—a major builder of cloud rack and AI cluster hardware—to Sanmina, letting AMD redirect resources toward higher-margin chip design and AI computing.
$AMD has offloaded a very asset-heavy part of their business. Closing this deal will help margin expansion and should be accretive to shareholders for Q4 earnings. Nikolias Goninus tweeted.
● For AMD, ditching the manufacturing-intensive unit means better capital efficiency and potentially stronger Q4 results. For Sanmina, it's a win that boosts their footprint in the booming Cloud and AI infrastructure space while cementing their role as AMD's go-to supplier for next-gen data center gear.
● The move fits a wider industry pattern: chip companies are stepping back from heavy manufacturing to focus on design and innovation, leaving the infrastructure buildout to specialized partners.
Peter Smith
