According to Bloomberg, there are at least four contenders to buy AMD's AI server assembly plants for as much as $4 billion, a much higher sum than initially thought. The report says the company may announce the deal already in the second quarter, but it has yet to reach it.
Taiwanese manufacturers have already increased their presence in North America, particularly in Mexico, where companies like Foxconn operate AI server assembly plants. However, President Donald Trump's push for more domestic production, alongside threats of tariffs on Mexican imports, has led some companies to reconsider their strategies. Since Trump’s election in November, Hon Hai has acquired land in the U.S., while Quanta Computer's board approved a $230 million capital injection into its American subsidiary.
When AMD acquired ZT Systems for $4.9 billion, a leading supplier of AI servers, the company indicated that it bought it for design expertise to compete with Nvidia's rack-scale solutions (e.g., NVL36, NVL72) and was not interested in producing its servers and, therefore, competing against its clients. To that end, AMD plans to sell the plant that makes ZT's machines. The facilities are located in New Jersey and Texas. Before AMD's acquisition, ZT had been a long-term supplier for Inventec.
So far, Taiwan-based companies Compal, Inventec, Pegatron, and Wistron have shown interest in a deal potentially worth between $3 billion and $4 billion, which is higher than initially believed, though because demand for AI servers is high as well as uncertainties with tariffs imposed on technology imported to the U.S. from Asia, potential buyers may be willing to pay a premium for AMD's assets it inherited from ZT Systems. A final agreement could be reached in the second quarter, though discussions are ongoing, and companies make no official comments.
In the year leading up to AMD's takeover, the manufacturing operations generated approximately $10 billion in revenue, which makes the sale a major transaction in the AI server industry.
For potential buyers, acquiring these facilities means securing a foothold in AI server production, a sector that is expanding at a rapid pace. The U.S. locations could provide an advantage in avoiding tariffs and import restrictions, which certainly increases their value.
