Microsoft Plans 632K SF Data Center Hub in San Jose

Microsoft is planning to build a two-building, 632K SF data center campus in San Jose as part of its global goal to build up to 100 hyperscale facilities each year.

The tech giant has filed plans to build the complex on 22 vacant acres at the intersection of Orchard Parkway and Component Drive near the Guadalupe River.

Microsoft acquired the site for about $79M last year. The Redmond, WA-based company is planning to build two four-story data centers, each encompassing 306K SF. Neither project has received city approval yet.

Three water storage tanks will be constructed on the northwest side of the property as part of the cooling system for the data center campus, along with two one-story buildings that will house mechanical equipment to operate the tanks.

The Orchard Parkway site includes a power substation and an onsite, high-voltage switching station owned by Pacific Gas & Electric.

According to the project plans, Microsoft will break ground on the first hyperscale facility in July 2024 and complete the unit in December 2024; the second data center building will be completed in 2028.

The Orchard Park campus is the second data center hub Microsoft has in the works in North San Jose. The tech giant also is planning to build two data centers encompassing 400K SF on a 65-acre site at 1657 Milpitas Road near the Coyote River.

Earlier this year, Microsoft announced plans to invest $1B in three data center campuses in North Carolina in Catawba County, which is rapidly becoming one of the largest cloud computing clusters in the US west of Charlotte.

Microsoft’s NC data centers, encompassing 670 acres, will be located in Conover, Hickory and Maiden. In 2021, Microsoft bought 900 acres in Boydton, where it already is operating a cluster of data centers encompassing 1M SF.

The Catawba County Economic Development Corp. provided incentives including performance-based tax breaks equal to 50% of real property tax and 85% personal property tax spread over 10 years for the Microsoft initiative.

Google, Apple and Meta already put down roots in the cloud computing cluster in Catawba County. Google put its first NC data center in Lenoir, NC in 2007. Two years later, Apple invested $1B in a data center cluster in Maiden.

In 2010, Meta—then known as Facebook, initiated a data center project in Forest City in Rutherford County, NC. Google and Meta have since added capacity at their NC sites, with Google adding a second facility in Lenoir and Meta building three data centers in Forest City, the most recent in 2015.

In June, Apple filed plans to build a 240K SF data center in Maiden.