Sanmina Enhances Its Market Position Through ZT Systems Acquisition from AMD

Sanmina Corporation, a frontrunner in integrated manufacturing solutions, has taken a significant step in bolstering its capabilities within the cloud and artificial intelligence (AI) sector. Announced on May 19, 2025, Sanmina's strategic agreement to acquire the data center infrastructure manufacturing business of ZT Systems from AMD marks a pivotal moment in the company's journey to becoming a powerhouse in the fast-evolving technology landscape.

A Strategic Move for Growth

Sanmina's acquisition of ZT Systems, a key player known for providing high-performance cloud and AI infrastructure to major hyperscalers, comes at a time when the demand for advanced data center solutions is surging. With a purchase price of $2.55 billion in cash and equity, plus up to $450 million contingent on performance, the deal represents a robust investment aimed at increasing Sanmina's scale and market exposure.

Jure Sola, Chairman and CEO of Sanmina, articulated the strategic intent behind the acquisition, stating, "The acquisition of ZT Systems' manufacturing operations positions Sanmina as an industry leader in the cloud and AI ecosystem. This allows us to capitalize on the significant growth opportunities presented by this market."

Strengthening Capabilities

The addition of ZT Systems not only enhances Sanmina's existing technology offerings but also significantly increases its manufacturing capabilities. ZT Systems’ impressive annual revenue run-rate of approximately $5 - $6 billion and its vast expertise in systems integration will provide Sanmina with a competitive edge in delivering comprehensive cloud infrastructure solutions.

With an established presence in New Jersey, Texas, and the Netherlands, ZT Systems brings advanced liquid cooling technologies and an extensive supply chain that can support Sanmina's expanded capabilities in delivering integrated manufacturing solutions.

Partnership with AMD

A noteworthy aspect of this acquisition is the strategic partnership that Sanmina will maintain with AMD. While AMD will retain the AI systems design segment of ZT Systems, Sanmina is set to become the preferred new product introduction (NPI) manufacturing partner for AMD. This collaboration is anticipated to expedite the deployment of AMD’s AI solutions, further embedding Sanmina’s role in the cloud infrastructure ecosystem.

Forrest Norrod, Executive Vice President at AMD, emphasized the importance of this partnership, stating, "This agreement will help accelerate the U.S.-based manufacturing of AMD AI solutions, enhancing quality and time-to-deployment for our customers. Together, we will set the standard for excellence in the AI domain."

Financial Implications and Market Outlook

The financial ramifications of this acquisition are promising. Sanmina expects the deal to be accretive to its non-GAAP earnings per share (EPS) in the first year following the closure of the transaction. The projected growth in revenue is expected to double within three years, reflective of the soaring demand for cloud and AI technologies.

Furthermore, the integration of ZT Systems’ manufacturing prowess into Sanmina's operations is expected to generate considerable synergies, increasing operational efficiencies and innovation capabilities across the board. Sanmina aims to deepen its relationships with existing customers while also attracting new clients through the expanded service offerings enabled by this acquisition.

Conclusion

In summary, Sanmina's acquisition of ZT Systems represents a significant leap forward in its mission to dominate the cloud and AI ecosystem. This transaction not only aligns with the growing demand for innovative technology but also strategically positions Sanmina to address the pressing needs of its customers and stakeholders effectively. As we look towards the future, the collaboration between Sanmina and AMD is set to ignite new opportunities and redefine standards in the AI manufacturing landscape.

Sanmina’s strategic foresight and commitment to excellence will undoubtedly pave the way for sustainable growth and enhanced shareholder value in the coming years.

For more information about the acquisition and future developments, Sanmina will be hosting a conference call to discuss this announcement in detail.