CCCS Clears Proposed Acquisition of ZT Group Int’l, Inc. by Advanced Micro Devices, Inc.

6 January 2025

1. The Competition and Consumer Commission of Singapore (“CCCS”) has cleared the proposed acquisition of ZT Group Int’l, Inc. (“ZT”) by Advanced Micro Devices, Inc. (“AMD”) (collectively, the “Parties”) (the “Proposed Transaction”) ^[1].

2. CCCS has assessed that the Proposed Transaction, if carried into effect, will not infringe the section 54 prohibition of the Competition Act 2004 (the “Act”), which prohibits mergers that may substantially lessen competition within any market in Singapore.

Background

3. AMD is a fabless global semiconductor company that develops computer processors and related technologies. As part of its data centre business segment, AMD supplies semiconductor devices globally for use in data centres, including the following: central processing units (“CPUs”); discrete graphics processing units (“GPUs”); field programmable gate arrays (“FPGAs”); and Smart Network Interface Cards (“SmartNICs”). AMD’s Singapore facility is a product development centre that conducts Research & Development activities for pre- and post-silicon development. AMD offers all products globally, including to customers in Singapore.

4. ZT is an original design manufacturer (“ODM”) of server and storage solutions for data centres. It has design, engineering, and manufacturing capabilities, and is principally located in the United States. ZT’s data centre business comprises server design and engineering, server manufacturing and related services (including test, integration and support services). ZT builds customised server solutions for its customers, which are primarily large-scale data centres (known as hyperscalers). ZT’s services are offered globally, including to customers in Singapore.

5. On 22 November 2024, upon the receipt of a complete Form M1, CCCS began reviewing the Parties’ application for a decision on whether the Proposed Transaction would infringe section 54 of the Act. CCCS conducted a public consultation from 26 November 2024 to 10 December 2024 and sought feedback from various stakeholders, including competitors and customers of the Parties. Most respondents did not raise any concerns.

CCCS’s Assessment

6. While the Parties do not supply any overlapping products or services in Singapore, the semiconductor products for data centre servers supplied by AMD are incorporated downstream into data centre servers which are supplied by ZT. Given that both semiconductor products and data centre servers are procured by customers of the Parties, CCCS’s assessment focused on the risk of market foreclosure by means of a tying or bundling strategy on customers of semiconductor products and data centre servers (i.e. data centre operators).

7. With data, feedback and analysis, CCCS concluded that the Proposed Transaction is unlikely to lead to a substantial lessening of competition in the supply of semiconductor products and the supply of data centre servers given that AMD is unlikely to have significant market power in the global supply of server CPUs, discrete GPUs, data centre FPGAs, and data centre SmartNICs for data centre servers and, ZT is unlikely to have significant market power in the global supply of data centre servers.^[2] In this regard, it is unlikely that the merged entity will be able to leverage market power in one market via a tying or bundling strategy to profitably increase sales in another market.

8. Further information on the notification and CCCS’s Grounds of Decision will be made available in due course on CCCS’s Public Register at www.cccs.gov.sg.

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About the Competition & Consumer Commission of Singapore

The Competition and Consumer Commission of Singapore (“CCCS”) is a statutory board of the Ministry of Trade and Industry. CCCS administers and enforces the Competition Act 2004 which empowers CCCS to investigate and adjudicate anti-competitive activities, issue directions to stop or prevent anti-competitive activities and impose financial penalties. CCCS is also the administering agency of the Consumer Protection (Fair Trading) Act 2003 which protects consumers against unfair trade practices in Singapore. Our mission is to make markets work well to create opportunities and choices for businesses and consumers in Singapore.

For more information, please visit www.cccs.gov.sg.

^[1] The Proposed Transaction will be executed through AMD’s purchase of ZT’s shares.

^[2] Based on various factors including the Parties’ lack of high market share, the nature of the industry where it is the end-customers which decide on and purchase the specific semiconductor components and the ability of some end-customers to self-supply.