AMD in Talks to Sell $4 Billion AI Server Assembly Plants Amid Rising Demand
AMD is in discussions to sell its AI server assembly plants, inherited from ZT Systems, for as much as $4 billion, significantly higher than initial estimates. The facilities, located in New Jersey and Texas, are drawing interest from multiple bidders, with a deal potentially being finalized in the second quarter of this year, according to Bloomberg.
Taiwanese Manufacturers Eye U.S. Expansion
The prospective buyers include several Taiwan-based technology giants—Compal, Inventec, Pegatron, and Wistron—who are looking to strengthen their AI server production capabilities. Their interest comes as the demand for AI servers surges, fueled by advancements in artificial intelligence and data center infrastructure.
Many of these companies already have manufacturing operations in North America, particularly in Mexico, where Foxconn and others operate AI server assembly plants. However, political and economic factors, including President Donald Trump’s push for increased domestic production and potential tariffs on Mexican imports, have encouraged some companies to reassess their strategies and invest directly in U.S.-based manufacturing.
AMD’s Shift Away From Manufacturing
AMD acquired ZT Systems for $4.9 billion last year, largely to leverage its design expertise and compete with Nvidia’s AI server solutions. However, the company made it clear that it was not interested in manufacturing serversand did not want to compete with its own clients. As a result, AMD is now looking to divest the manufacturing facilities that were part of the ZT Systems acquisition.
In the year leading up to AMD’s takeover, the manufacturing operations at these facilities generated approximately $10 billion in revenue, making this one of the most significant transactions in the AI server industry.
Strategic Value of the Deal
For potential buyers, acquiring AMD’s facilities would provide a key foothold in AI server production, a rapidly growing sector as cloud providers and enterprises expand their AI-driven computing capabilities. Owning U.S.-based production sites could also help bypass potential tariffs and import restrictions, further increasing the strategic value of these assets.
The transaction is expected to reshape the competitive landscape of AI server production, with the new owner gaining a critical edge in supplying AI infrastructure to tech giants and enterprise clients. As discussions continue, the tech industry will be watching closely to see who secures one of the most sought-after AI manufacturing deals in recent history.
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