Advanced Micro Devices (AMD) is currently negotiating the sale of its AI server assembly plants, inherited through its $4.9 billion acquisition of ZT Systems in 2022. The assets, which are expected to be valued between $3 billion and $4 billion, have generated interest from several Taiwanese companies, including Compal Electronics, Inventec, Pegatron, and Wistron.

The sale comes as AMD seeks to avoid competing with its own customers, such as Dell Technologies and Hewlett Packard Enterprise, by offloading manufacturing operations. Prior to AMD's acquisition, ZT Systems had long been a supplier for Inventec. AMD's acquisition of these plants included facilities in New Jersey and Texas, which may now offer added value due to their strategic locations in the U.S. These plants could help potential buyers avoid tariffs and import restrictions that have been a concern due to trade tensions, particularly those from the Trump administration aimed at boosting domestic manufacturing.

The discussions are ongoing, with a potential deal expected to be finalized by the second quarter of this year. The assets could be sold at a premium, largely due to the growing demand for AI servers amid the rapid expansion of the AI industry.

The manufacturing division, which generated around $10 billion in revenue in the year before AMD's purchase, is considered a significant player in the AI server market. For companies looking to expand their AI server production capabilities, these facilities present an attractive opportunity. Additionally, the U.S.-based locations offer an advantage in circumventing tariff issues, further increasing their appeal.

Taiwanese firms, particularly those with established operations in Mexico, have been looking to shift some of their production to the U.S. in response to tariff threats. Foxconn and Quanta Computer have already made moves to expand their U.S. presence, further highlighting the strategic importance of acquiring these AI server assembly plants.

While the deal is not yet finalized, AMD's sale of these facilities marks a pivotal moment in the AI server industry, offering an opportunity for interested companies to secure a foothold in the rapidly growing sector.