AMD officially divests ZT Systems' manufacturing division to focus on full-stack AI solutions

According to Zhitong Finance APP, AMD (AMD.US), a leader in PC and data center chips, announced on Monday local time that it has completed the spin-off and full transfer of its data center infrastructure manufacturing business, ZT Systems, based in the United States, to Sanmina (SANM.US), which focuses on electronic manufacturing services. This move not only allows AMD to gain positive cash flow in the short term but also aims to enable the chip giant to concentrate resources on creating and accelerating the delivery of its proprietary high-performance "CPU + GPU + software architecture" AI developer full-stack rack-level dedicated platform in a more asset-light and efficient operational model. In a press release, the company stated that as part of the transaction, AMD will retain ZT Systems' world-class design and customer empowerment teams to significantly enhance the quality and efficiency of AMD's AI computing clusters for AI cloud computing system customers and to greatly reduce deployment cycles. At the same time, Sanmina has officially become AMD's preferred new product introduction (NPI) manufacturing partner for cloud AI server computing racks and large-scale AI computing infrastructure solutions. "Our strategic partnership with Sanmina combines the hardcore manufacturing strength in the U.S. with AMD's expertise in AI computing system design and customer empowerment, achieving high-quality growth, extremely fast deployment, and high flexibility at scale," said Forrest Norrod, Executive Vice President and General Manager of AMD's Data Center Solutions Business Unit. The latest statement indicates that AMD has completed the transfer of ZT's "heavy asset traditional manufacturing business" to Sanmina while retaining ZT's rack-level AI solution design and customer empowerment teams, aiming to improve quality and shorten deployment cycles for cloud customers; at the same time, Sanmina is designated as the preferred NPI manufacturing partner in the U.S. responsible for ramping up mass production of AMD's cloud rack and cluster-level AI solutions. AMD's official stance and management's statements emphasize keeping system design/solutions and customer delivery within AMD while handing over heavy asset manufacturing to Sanmina to achieve "quality, speed, and flexibility" in scaled delivery. With AMD's release of the Helios rack-level AI computing super platform on OCP (competing with AI computing solutions from Nvidia, Dell, and others), it clearly defines the AI developer full-stack rack-level AI system path of "CPU + GPU + high-performance networking + ROCm software stack," aiming for the successful implementation of AMD AI computing solutions for large customers. Since the beginning of this year, AMD's stock price has risen by more than 110%, with most of the increase concentrated in the past month. AMD's market capitalization ranking in the S&P 500 index has jumped from 44th at the beginning of the year to 21st, with a market cap exceeding $410 billion and continuously setting new historical highs. The main catalyst for AMD's recent strong momentum is a significant AI computing infrastructure cooperation agreement worth billions of dollars reached with AI application leader OpenAI. This move not only validates the strong capabilities of AMD's AI computing infrastructure technology but also makes Wall Street investment institutions more optimistic about its future financial prospects HSBC reiterated its "Buy" rating on AMD (AMD.US), a long-time competitor of Nvidia, in its latest bullish report, significantly raising its target price from $185 to $310, the highest target price level on Wall Street. Analyst Lee stated that the company's recent deal with OpenAI "presents a more favorable bullish outlook" and enhances the clarity of earnings forecasts and market bullish sentiment; he also added, "There may be further upside potential from pricing premiums and additional AI GPU shipment expansion in the future." As of last Friday's market close, AMD's stock price was $252.92