San Francisco Bay Area: Silicon Valley Sees Surge in Data Center Construction as Tech Giants Expand Operations

Apr 18, 2023 | Posted by Abdul-Rahman Oladimeji

Silicon Valley is experiencing a surge in the construction of data centers, according to a report by real estate services firm Cushman & Wakefield. At the end of last year, 17 new data centers were either under construction or in development, with a total planned area of 4.7 million square feet. For comparison, all the data centers currently in operation in Silicon Valley by the 25 companies on the Business Journal's Data Center Operators List occupy about 8 million square feet. Cushman & Wakefield noted that the area remains a strong market, despite rising land and power prices. Some of the companies that are building new facilities include Amazon, Microsoft, Digital Realty Trust, and Prime Data Centers. Ten of the new data centers are already under construction. The total capacity of these centers will add 688 megawatts to the region.

In a separate report, Cushman & Wakefield ranked Silicon Valley tied for fifth among the best places worldwide to build a data center. The report analyzed factors such as market size, availability of fiber internet connections, taxes, and land prices. Although land prices are high in Silicon Valley, the report noted that rising data center usage from the high concentration of tech giants has boosted the region's ranking. Overall, the data center boom in Silicon Valley reflects a larger trend in the technology industry, which has seen rapid growth in recent years. As more companies rely on cloud computing and data storage, the demand for data centers is only expected to increase.