NVIDIA EXPANSION PACE TO INTENSIFY
The speed of development in Santa Clara for the maker of semiconductors to process graphics appears to mirror the tech giant’s remarkable growth
Nvidia, bolstered by profits of $3 billion a year, wants to expand the size and scope of the second phase of its new campus in Santa Clara, according to realty brokerage and city reports.
The tech company’s new campus will feature a trio of striking buildings. The first phase, a roughly 500,000-square-foot complex, was completed in 2017.
The intensified pace of development in Santa Clara for Nvidia, a maker of semiconductors to process graphics, appears to mirror the tech giant’s remarkable growth.
During the 12 months that ended in late January, Nvidia earned $3.05 billion on revenue of $9.71 billion. The company’s profits in the three-month period that ended Jan. 28 were up 71 percent fromthe same quarter the year before, while revenue was up 34 percent.
Investors have stampeded to grab Nvidia’s shares. Over the last year, Nvidia’s shares have more than doubled, closing at $260.13 Thursday, up 106 percent from the year-ago price of $126.50.
The latest update with Nvidia’s campus: A few passages in a report circulated by Cushman & Wakefield state phase 2 of the complex would be dramatically larger than what was first envisioned.
Rather than construct a 500,000-squarefoot phase 2 building, Nvidia will develop 750,000 square feet.
“It was to be identical to phase 1, which they just occupied, which is 500,000 square feet in two stories,” said Julie Leiker, amarket research director with Cushman & Wakefield. “They will add a third story to make it 750,000 square feet.”
What thismeans is that potentially 1,000 more Nvidia employees could work in the second building than what might have been contemplated initially. A 500,000-square-
foot building might typical ly accommodate 2,500 workers, while a 750,000- square-foot office building could have room for 3,750 workers.
“In the second quarter of fiscal 2019, we intend to begin construction on a 750,000-square-foot building on our Santa Clara campus,” Colette Kress, Nvidia’s chief financial officer, said in a commentary released Thursday that accompied the company’s quarterly financial results. The company’s second quarter covers the months ofMay, June and July.
A regulatory filing submitted to the Securities and Exchange Commission shed some more light on the company’s growth efforts in its hometown.
“In January 2018, we exercised the option to terminate the off-balance sheet, build- to- suit operating lease financing arrangement related to our new Santa Clara campus building, and purchased the building for $335 million,” Nvidia stated in the SEC fil- ing on Feb. 28.
The larger scope contemplated for the second building might cause Nvidia to scale back the size of the third and final building on the property, according to the city of Santa Clara.
“The recent site and architectural approval included changes in the planned square footage of the phase 2 and phase 3 buildings so that the phase 2 building was increased from 500,000 to 750,000 square feet and the future phase 3 building would be reduced from 931,200 square feet to 699,400 square feet,” Andrew Crabtree, Santa Clara’s director of community development, said in comments emailed to this news organization.
Santa Clara has authorized Nvidia to construct as much as 1.95 million square feet of offices on the site. Crabtree added, “The overall campus square footage is unchanged.”
Nvidia has captured a growing number of customers for its chips in fields well beyond the company’s original business in the digital games sector. Autonomous vehicles and the deep learning segments of artificial intelligence also have proved to be fertile ground for Nvidia.
The tech company’s growth suggests it prefers to be in the Bay Area rather than in other states, said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.
“Nvidia and other tech companies like the attractiveness of the Silicon Valley area for their employees,” Levy said. “If they are laying out their own money, and building on their own land, that says Nvidia is confident in its business and they are confident in Silicon Valley.”