Supermicro Eyes 3 MSF Bay Area Expansion

Supermicro plans to build a roughly 3 million-square-foot industrial complex in San Jose, Calif., marking its third Silicon Valley campus.

Construction is set to kick off this year on the park’s first building, which will measure more than 300,000 square feet.

Supermicro manufactures liquid coolers for AI factories, which reduce the carbon footprint of data centers and lower operational costs. The tech company is bound to triple its footprint in San Jose, where it owned roughly 1.5 million square feet of office and manufacturing space as of June 2024.

Supermicro’s future campus

The first building of the campus will rise at 550 E. Brokaw Road, on the site of a former Fry’s Electronics store. The San Jose-based firm went out of business in 2021 following a series of store closings.

Supermicro purchased the 20-acre site for $80 million last February. At the time, the property was entitled for the development of a 1.9 million-square-foot office campus.

In October, Supermicro filed the current plans for the manufacturing and office complex., designed by Arc Tec. Pacific Gas & Electric Co. will deliver the campus’ energy requirements, PG&E Vice President Teresa Alvarado said in prepared remarks.

Silicon Valley’s supply-restrained industrial market

Silicon Valley’s industrial pipeline had just 2 million square feet under construction as of December, according to a report by CBRE. The market’s vacancy rate stood at 3.3 percent at the end of 2024, tightening 30 basis points year-over-year.

With no industrial deliveries during 2024’s last quarter, the market is undergoing supply challenges, the same source shows. AI hardware companies drive industrial demand in Silicon Valley as they’re looking for specialized facilities with heavy power. However, only 17.5 percent of the available space in December could provide 4,000 amps or more.

Hines Interests seeks to capitalize on this demand. Last June, the company broke ground on a three-building advanced manufacturing campus in San Jose, which was the largest industrial development in Silicon Valley at the time. Completion is expected this summer.