Acquisitions and Divestitures

6 Months Ended

Jun. 28, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisitions and Divestitures

ZT Systems Acquisition

On March 31, 2025 (the Acquisition Date), the Company completed the acquisition of all issued and outstanding shares of ZT Systems for a total purchase consideration of $4.4 billion. ZT Systems is a provider of AI and general-purpose compute infrastructure for hyperscale computing companies. The acquisition is expected to enable the Company to deliver end-to-end AI solutions and accelerate the design and deployment of AMD-powered AI infrastructure at scale optimized for the cloud.

The purchase consideration is comprised of the following (in millions):


Cash paid on Acquisition Date	$	3,188
Fair value of 8,335,849 shares(1) issued on Acquisition Date	860
Fair value of contingent consideration(2) not yet paid	361
Total purchase consideration	$	4,409

(1) Represents the fair value based on the closing price of AMD common stock on March 28, 2025 of $103.22 per share, as the transaction closed prior to the opening of markets on March 31, 2025.

(2) Represents the estimated fair value of 740,961 shares of AMD common stock to be issued and $300 million of cash to be paid to ZT Systems stockholders and warrant holders assuming the contingencies are fully met.

The purchase consideration was allocated as follows (in millions):


Cash and cash equivalents	$	1,500
Assets held for sale	5,965
Other assets	81
Total assets acquired	7,546
Liabilities held for sale	3,221
Other liabilities	124
Total liabilities assumed	3,345
Fair value of net assets acquired	4,201
Goodwill	208
Total purchase consideration	$	4,409

The Company allocated the purchase price to identified tangible and intangible assets acquired and liabilities assumed based on estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates and assumptions made by management. Fair values of assets and liabilities held for sale were determined using the income and cost valuation approaches which incorporate significant unobservable inputs. Goodwill arising from the ZT Systems acquisition was assigned to the Company’s Data Center reporting unit. Goodwill was primarily attributed to the assembled workforce and is not expected to be deductible for income tax purposes.

At the time of the announcement of its acquisition of ZT Systems in August 2024, the Company disclosed its intent to divest ZT Systems’ data center infrastructure manufacturing business (the ZT Manufacturing Business), while retaining only certain intellectual property and employees (the ZT Design Business). Accordingly, upon acquisition, the Company classified the ZT Manufacturing Business and its related assets and liabilities as held for sale. The results of the ZT Design Business and the ZT Manufacturing Business are presented within continuing operations and discontinued operations of the Company’s consolidated statements of operations and cash flows, respectively.

The financial results of the ZT Design Business, which are not material, are included in the consolidated statements of operations from the Acquisition Date within the Data Center segment. Transaction costs of $36 million and $47 million were recorded within Marketing, general and administrative expenses during the three and six months ended June 28, 2025.

The following summarizes carrying amounts of major classes of ZT Manufacturing Business assets and liabilities held for sale as of June 28, 2025 (in millions):


Accounts receivable	$	1,883
Inventories	1,353
Other assets	631
Goodwill and intangible assets	459
Total assets held for sale	$	4,326


Accounts payable	$	1,384
Accrued and other liabilities	584
Total liabilities held for sale	$	1,968

Assets and liabilities held for sale are recorded using the lower of carrying values or fair values less estimated costs to sell.

The following table presents a reconciliation of the contingent consideration liability (in millions:)


Initial valuation of contingent consideration liability	$	361
Change in fair value	35
Contingent consideration liability, June 28, 2025	$	396

Contingent consideration liability was measured at fair value on Acquisition Date and is remeasured to fair value until the contingencies are resolved. The fair value of the contingent consideration liability was estimated based on the present value of the contingent cash and stock consideration using significant unobservable inputs such as risk-adjusted discount rates, equity volatility and simulated stock price. The simulated stock price was calculated using the Monte Carlo simulation method. The fair value of contingent consideration liability may increase or decrease based on changes in these significant inputs. The amount is recorded within Accrued liabilities of the Company’s consolidated balance sheets and the changes in fair value are recognized within Income from discontinued operations of the consolidated statements of operations.

ZT Manufacturing Business Divestiture

On May 18, 2025, the Company entered into an equity purchase agreement (the Sale Agreement) with Sanmina Corporation to sell the ZT Manufacturing Business for $3.0 billion in cash and stock, inclusive of a contingent payment of up to $450 million, subject to customary adjustments for working capital and other items. The Sale Agreement provides that if the sale is not completed by May 18, 2026, subject to two automatic extensions until November 18, 2026, the Company will be entitled to receive a termination fee of up to $153 million. The transaction is expected to close near the end of 2025, subject to regulatory approvals and customary closing conditions.

Other Acquisitions

During the three and six months ended June 28, 2025, the Company completed other business acquisitions for a total consideration of $36 million that resulted in the recognition of $36 million of goodwill. The financial results of these acquired businesses, which were not material, were included in the Company's consolidated statements of operations from their respective dates of acquisition within the Data Center segment.

Pro Forma Information

Since the ZT Manufacturing Business represents the majority of ZT Systems’ operations and is being held for sale, pro forma information presenting the combined results of operations of ZT Systems and other acquired entities were deemed neither material nor meaningful to the Company’s consolidated income from continuing operations and were omitted.