Sanmina Corp’s Strategic Acquisition: A Bold Move into Cloud and AI

In a decisive move that underscores its ambition to dominate the cloud and AI sectors, Sanmina Corporation has announced the acquisition of ZT Systems’ data center infrastructure manufacturing business from Advanced Micro Devices, Inc. (AMD). This $3 billion deal, comprising $2.55 billion in cash and equity along with $450 million in contingent consideration, marks a significant expansion for Sanmina, a leading player in the information technology sector.

A Game-Changing Expansion

Sanmina’s acquisition of ZT Systems is not just a financial transaction; it’s a strategic maneuver designed to catapult the company into new heights of market influence. By integrating ZT Systems’ manufacturing capabilities, Sanmina is poised to significantly enhance its scale and end-market exposure, particularly in the burgeoning fields of cloud and AI infrastructure. This acquisition is expected to be accretive to Sanmina’s non-GAAP EPS in the first year post-close, signaling a promising financial outlook.

Strategic Divestiture by AMD

AMD’s decision to divest ZT Systems’ manufacturing business is a calculated move to streamline its operations and focus on its core competencies. By partnering with Sanmina, AMD is not only ensuring a preferred new product introduction (NPI) manufacturing partnership but also reinforcing its commitment to innovation in the data center infrastructure space. This divestiture allows AMD to concentrate on its strategic priorities while Sanmina takes the helm in driving forward the manufacturing prowess of ZT Systems.

Sanmina’s Market Position

With a market capitalization of $4.5 billion and a close price of $84.56 as of May 15, 2025, Sanmina has demonstrated robust financial health and strategic acumen. The company’s focus on circuit fabrication, system assembly, and high-end enclosures and cabling has established it as a formidable force in the electronic equipment, instruments, and components industry. This acquisition further solidifies Sanmina’s position as a leader in integrated manufacturing solutions, expanding its footprint in the critical cloud and AI sectors.

Looking Ahead

Sanmina’s leadership is confident that this acquisition will not only enhance its service offerings but also provide a competitive edge in a rapidly evolving market. The company plans to host a conference call today at 8:30 a.m. ET to discuss the details of the transaction and its implications for the future. As Sanmina embarks on this transformative journey, stakeholders and industry observers alike will be keenly watching its next moves in the dynamic landscape of information technology.

In conclusion, Sanmina’s acquisition of ZT Systems is a bold and strategic step that promises to reshape its market presence and drive growth in the cloud and AI sectors. With a clear vision and a strong financial foundation, Sanmina is well-positioned to capitalize on this opportunity and emerge as a leader in the next wave of technological innovation.