AMD Reshapes Strategy, Plans $4 Billion Data Center Asset Sale While Doubling Down on GPUs

AMD Reshapes Strategy, Plans $4 Billion Data Center Asset Sale While Doubling Down on GPUs

AMD plans to divest ZT Systems’ data center assets worth up to $4 billion to Taiwanese firms, staying focused on its GPU roadmap.AMD’s server plants in New Jersey and Texas could help buyers avoid tariffs as it exits manufacturing to avoid competing with customers.Get real-time earnings alerts before the market moves and access expert analysis that uncovers hidden opportunities in the post-earnings chaos.

Advanced Micro Devices, Inc AMD-2.43% Get Free Report discussed divesting ZT Systems’ data center infrastructure production capabilities to Taiwan’s Compal Electronics Inc, Inventec Corp, Pegatron Corp, and Wistron Corp, as disclosed earlier. Nevertheless, AMD had also remained adamant about not changing its focus priority from its primary GPU roadmap.

The assets could be worth $3 billion-$4 billion, including debt, Bloomberg reported, citing unnamed sources familiar with the matter.

The server manufacturing operations had ~$10 billion in revenue over the 12 months before AMD’s purchase.

Some of the plants are in New Jersey and Texas, making them potentially attractive to avoid tariffs and other measures from U.S. President Donald Trump’s administration.

The Nvidia Corp, NVDA-2.59%

Get Free Report

rival agreed to acquire the data center manufacturing plants in 2024.

AMD’s $4.9 billion acquisition of ZT Systems helped it acquire the assets. In 2024, AMD shared plans to divest the manufacturing business to avoid competing with its customers, such as Dell Technologies Inc, DELL-3.57%

Get Free Report and Hewlett Packard Enterprise Co, HPE-2.18%

Unlike Nvidia, AMD’s stock value lost over 37% in the last 12 months as it failed to capitalize on the AI frenzy.

BofA Securities‘ Vivek Arya, Goldman Sachs’ analyst Toshiya Hari, and JP Morgan’s Harlan Sur maintained their Neutral stock rating on AMD after its fourth-quarter results, citing its struggle to carve out a niche against Nvidia’s dominance and the rise of custom AI chips, challenges in cyclical sectors like industrial and communication, and weaker-than-expected demand for data center GPUs.

Investors can gain exposure to AMD through iShares Semiconductor ETF, SOXX-2.22%

+ Free Alerts and EA Series Trust Strive US Semiconductor ETF, SHOC-2.51%

READ the latest news shaping the AI Chips market at AI Chips News

AMD Reshapes Strategy, Plans $4 Billion Data Center Asset Sale While Doubling Down on GPUs, source