Advanced Micro Devices (AMD) is preparing to sell its AI server assembly plants in Texas and New Jersey, aiming to raise between $3 billion and $4 billion. The company is seeking bids from several potential buyers, including Taiwan-based Compal Electronics, Wiwynn Corp., and US-based Jabil Inc., according to Bloomberg.
The sale comes shortly after AMD’s $4.9 billion acquisition of ZT Systems in March 2025, which included the two facilities and their 1,500 skilled workers. However, AMD is following a broader industry strategy: focusing on chip design and intellectual property while moving away from manufacturing operations. The company expects to finalize the deal by the end of the second quarter of 2025.
For AMD, the divestiture avoids potential channel conflicts with key customers like Dell and HP, which also buy server equipment. It also reflects the growing separation between chip designers and manufacturers in the global semiconductor industry.
Taiwanese manufacturers race to expand US operations
The sale has drawn interest from Taiwanese electronics giants who are aggressively expanding their US presence. Amid rising tariffs on Chinese imports, including a new 145% minimum tariff on many electronics — owning manufacturing assets in the US has become a strategic priority for original design manufacturers (ODMs).
For companies like Compal and Wiwynn, acquiring AMD’s US plants offers an immediate path to scale operations without the costs and time associated with building new facilities. The plants also provide built-in compliance with potential “Made in America” requirements, giving them an advantage in an increasingly protectionist trade environment.
The $3-4 billion valuation of AMD’s server facilities reflects the soaring demand for AI infrastructure. The AI server market is far from a commodity business, it requires advanced expertise in thermal management, power delivery, and integration of accelerators like GPUs.
Nvidia’s recent announcement of plans to produce up to $500 billion worth of AI infrastructure in the US over four years highlights how critical server manufacturing has become. The $10 billion revenue reportedly generated by ZT Systems’ manufacturing business further underlines the strategic importance of these assets in the AI supply chain.
By selling the manufacturing plants but retaining ZT Systems’ engineering talent and intellectual property, AMD is doubling down on a proven “fabless” strategy, focusing on high-margin chip design rather than capital-intensive manufacturing.
TSMC still eyeing a slice of Intel’s foundry
This approach mirrors the model pioneered by Taiwan Semiconductor Manufacturing Company (TSMC), allowing AMD to enhance its AI data center capabilities without competing directly with its hardware customers.
While the sale price is expected to be lower than the total $4.9 billion AMD paid for ZT Systems, the transaction underscores that AMD places more strategic value on IP and engineering talent over physical production assets.
