Advanced Micro Devices Inc. on Monday said it will sell the server-manufacturing business of recently acquired ZT Systems to Sanmina, an electronic manufacturing services company, in a $3 billion cash-and-stock deal.

The agreement, expected to close by the end of this year, illustrates AMD’s push to produce more of its chips in the U.S. as tensions rise in a trade war with China, and President Donald Trump continues to insist on more domestic manufacturing of semiconductors.

Under Monday’s accord, AMD said Sanmina will become a “preferred” new product introduction manufacturing partner for AMD’s cloud rack and cluster-scale artificial intelligence (AI) solutions. AMD will retain ZT’s AI systems design business, an important piece amid escalating computing requirements that necessitate mapping out thousands of chips strung together in clusters.

​​”By combining the deep experience of our AI systems design team with our new preferred NPI partnership with Sanmina, we expect to strengthen our U.S-based manufacturing capabilities for rack and cluster-scale AI systems and accelerate quality and time-to-market for our cloud customers,” Forrest Norrod, executive vice president of AMD’s data center solutions business unit, said in a statement.

The acquisition was not entirely surprising. AMD has made clear its intentions to spin off the server-manufacturing business since it said it would acquire ZT Systems, an AI and cloud infrastructure company, for $4.9 billion in August 2024. That acquisition closed in March.

Last month, AMD said its key central processor chips would soon be made at TSMC’s new production site in Arizona, marking the first time its products will be manufactured on American soil.