AMD Discusses Server Plant Sale For Up To $4 Billion

Bloomberg
24 Feb
  • Chipmaker has received interest from host of Taiwanese firms

  • A deal could play into Trump’s push for domestic manufacturing

Advanced Micro Devices Inc. is in talks with Asia-based companies over a sale of data center manufacturing plants it agreed to acquire last year, people familiar with the matter said.

Taiwan-based Compal Electronics Inc., Inventec Corp., Pegatron Corp. and Wistron Corp. are among those to have expressed interest in acquiring the plants, the people said. The assets could be valued at $3 billion to $4 billion, including debt, they said.

A sale may be announced as soon as the second quarter, according to the people, who asked not to be identified discussing confidential information. Deliberations are ongoing and there’s no certainty that Santa Clara, California-based AMD will reach a deal, they said.

Representatives for AMD, Compal, Inventec, Pegatron and Wistron declined to comment.

AMD has inherited the plants through its $4.9 billion acquisition of ZT Systems, which was announced in August. Prior to that, ZT was a longtime AI server assembly partner to Inventec. AMD said last year it would offload the manufacturing business to avoid competing with its customers, such as Dell Technologies Inc. and Hewlett Packard Enterprise Co.

Bloomberg Intelligence analysts Kunjan Sobhani and Oscar Hernandez Tejada estimated previously that the manufacturing division could go for $1.5 billion to $3 billion. The server manufacturing operations had revenue of about $10 billion over the 12 months prior to AMD’s purchase.

For potential buyers, it’s a chance to grab facilities used to make server machines that are at the heart of the artificial intelligence boom. Some of the plants are in New Jersey and Texas. Such locations are potentially attractive as a means to avoid tariffs and other measures from US President Donald Trump’s administration aimed at bringing technology manufacturing back to the US.

Taiwanese firms, including Hon Hai Precision Industry Co., rely on Mexico as a key AI server assembly and part production hub. Some have been increasing investments in the US as Trump threatens heavy tariffs on imports from Mexico as part of his efforts to revitalize domestic manufacturing.

Since Trump’s election win in November, Hon Hai has secured land in the US, while its Taiwanese peer Quanta Computer Inc.’s board approved a $230 million capital increase for its US unit.

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