Supermicro to Build 3M SF Industrial, Tech Campus in San Jose

Supermicro has unveiled plans to build a 3M square foot manufacturing and tech office complex in San Jose that will expand its capacity to produce advanced cooling systems to meet surging demand from AI data centers.

The San Jose-based tech giant announced that it will begin construction this year on the first building for the new campus, a 300K square foot industrial facility, on the former site of a Fry’s Electronics store at 550 East Brokaw Road.

AI data centers increasingly are adopting liquid cooling systems to maintain optimal performance and improve the energy efficiency of powerful AI processors, which traditional air cooling methods struggle to manage effectively.

Supermicro currently delivers 5,000 air-cooled and 2,000 liquid-cooled racks per month, a ratio that will change as the company accelerates its production of liquid-cooled units.

“As AI factories become more prevalent, liquid-cooled data centers are critical to meet these increasing customer demands. We anticipate that up to 30% of new data centers will adopt liquid cooling solutions,” Charles Liang, Supermicro’s CEO, said in a release.

Supermicro purchased the Fry’s store site, a retail landmark known for its Mayan-themed décor that closed in 2021, in February 2024 for $80M from Bay West Development. In 2023, Bay West received approval from the San Jose Planning Commission to build a 1.9M square foot office campus on the site.

Supermicro’s expansion will create its third campus in San Jose, including the company’s headquarters at 980 Rock Avenue, about a mile away from the 20-acre Fry’s store site. Supermicro bought its HQ site from the Mercury News in 2013 and redeveloped the property into an office and research complex in 2018.

The expansion on East Brokaw Road is expected to generate hundreds of new jobs at Supermicro, which currently employs about 3,000 workers in San Jose. The new opportunities will include engineering, production and corporate positions.

In a statement, Teresa Alvarado, PG&E’s VP for the South Bay and Central Coast region, said the utility is ready to provide sustainable power solutions for Supermicro’s new campus.

Expanding AI hardware companies have been driving demand for specialized industrial facilities with heavy power needs in Silicon Valley. Four of the five largest tenant requirements in the fourth quarter were AI hardware affiliated companies with an average demand of 390K square feet, according to CBRE’s latest market report.

There were no industrial construction completions in the 110M square foot Silicon Valley market in Q4 “mainly due to delayed PG&E electrification needed for buildings,” CBRE’s report said.

San Jose has been aggressively courting AI companies to its downtown, setting up AI incubators to breed startups in the city, which is offering discount utility rates and speedier permit processing to firms in the sector.

Last fall, Sunnyvale-based Plug and Play began operating an AI startup incubator at the vacant former Bank of Italy building on South First Street in San Jose. PG&E announced in June it will invest $350K to help fund the incubator, known as the Center for AI Excellence.