TD Synnex CEO Discusses Hyve's Remarkable Growth Amid Rising AI-Driven Data Center Demand

In an insightful conversation with CRN, Patrick Zammit, the president and CEO of TD Synnex, shed light on the impressive performance of the company's Hyve business, which achieved over 50 percent growth in gross billings during the fourth quarter of fiscal 2025. This remarkable growth is primarily attributed to the increasing investments in hyperscaler data centers and the strategic initiatives undertaken by Hyve.

Key Drivers of Growth

According to Zammit, the surge in Hyve's performance can be traced back to several key factors:

• Core Manufacturing Growth: The original design manufacturing (ODM) and custom manufacturing (CM) programs have shown steady growth, establishing Hyve as a reliable partner in the tech industry.
• Opportunistic Supply Chain Services: Hyve has capitalized on strategic component purchases, where hyperscalers leverage Hyve's expertise to manage pricing, inventory, and supply risk for critical components.
• U.S.-Based Operations: With over 70 percent of engineering and production resources located in the U.S., Hyve's domestic footprint enables rapid response to market demands, a crucial factor in today's geopolitical climate.

Zammit elaborated on the importance of Hyve's U.S. presence by stating, "The ability to produce in the U.S. from a sovereignty standpoint, from a proximity standpoint, to provide the flexibility when our customers want to ramp up, is a clear differentiator." This strategic positioning not only enhances response times but also aligns with the growing trend of domestic production due to supply chain concerns.

Engineering Capabilities and Co-Designing

Another significant advantage of Hyve lies in its engineering capabilities. Zammit pointed out that hyperscalers increasingly seek partners who can assist in co-designing solutions. As they look to optimize their data center architecture, Hyve's investment in engineering talent enables it to meet these expectations. "We can support the hyperscalers globally as a result," Zammit noted, emphasizing that this capability sets Hyve apart in a competitive marketplace.

Strong Performance in the PC Distribution Sector

Beyond Hyve, TD Synnex has also reported robust performance in its PC distribution business. Zammit anticipates that the Windows 11-driven refresh cycle will extend into the first half of 2026, fueled by the rising adoption of higher-priced AI PCs. This market segment is expected to benefit from increasing average selling prices (ASP) due to higher component costs, including DRAM and SSDs.

However, Zammit cautioned that while increasing prices can boost revenues in the short term, they may also impact overall sales volumes if customers decide to delay investments. "As we see memory prices increasing, vendors are passing on significant price increases which could create challenges in future volumes," he said.

Market Dynamics and Future Outlook

As TD Synnex navigates the evolving landscape of IT distribution, several market dynamics come into play. Zammit noted that while component pricing issues have impacted the broader industry, they did not significantly influence Hyve's fourth-quarter results. Looking ahead, he expressed cautious optimism about the overall market, particularly regarding the demand for AI-related technologies.

"We expect to see a continued need for investment in AI infrastructure as enterprises recognize its potential. This could lead to a refresh of existing systems and an increase in demand for upgrades," Zammit explained. He highlighted the importance of cloud computing and security as key areas poised for growth in the coming years.

Strategic Priorities for TD Synnex in 2026

Looking ahead to 2026, TD Synnex has outlined several strategic priorities to maintain its competitive edge:

Global Expansion: The company aims to establish itself as an end-to-end distributor, filling gaps in its technology and vendor portfolio across various markets.

Enhancing Enablement Programs: TD Synnex is committed to investing in best-in-class enablement programs for its customers, including pre-sales and solution architect resources.

• Digitalization Initiatives: Continued investment in digital platforms, including the PartnerFirst platform, will be crucial for improving operational efficiency and customer engagement.

In terms of technology focus, Zammit noted that while TD Synnex has a strong portfolio in North America, there is significant growth potential in regions such as APJ and Latin America, particularly in endpoint security technologies. The company is strategically assessing its market position to identify areas where it can strengthen its offerings.

Conclusion

In summary, TD Synnex's Hyve business has demonstrated remarkable growth due to a combination of strategic initiatives, including a focus on U.S.-based production and strong engineering capabilities. As the demand for AI-driven data center solutions continues to rise, Hyve is well-positioned to capitalize on these trends. Coupled with a robust performance in the PC distribution market and a clear strategic direction for 2026, TD Synnex is poised to navigate the evolving IT landscape effectively and capitalize on emerging opportunities.