SANTA CLARA -- Nvidia said Wednesday it will build a new $300 million headquarters this year in Santa Clara that could accommodate thousands of employees.

Construction is expected to begin in June on a 500,000-square-foot building that will be the first phase of what could eventually be a million-square-foot, two-building campus near San Tomas Expressway and Walsh Avenue.

The project represents an expansion for Nvidia, which makes chips for 3-D graphics, mobile devices and other high-performance uses. It is running out of room at its current million-square-foot campus across the street from the 24-acre site of its new headquarters.

"Our headquarters in Santa Clara, just a few blocks from where we started, barely has a spare desk," Jen-Hsun Huang, founder and chief executive officer of Nvidia, said in a blog post on Wednesday. "We're absolutely bursting at the seams."

Nvidia's expansion signals that the Silicon Valley tech boom that has ushered in two years of dazzling job growth in Santa Clara County is far from running its course.

"We see no slowdown in 2013," said Justin Hedberg, a first vice president with Kidder Mathews, a real estate brokerage. "There is a lot of demand for big blocks of space. There are a lot of companies out there right now looking for large spaces."


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Nvidia currently employs about 3,300 people in Santa Clara. The first phase of the new development could accommodate 1,000 to 2,000 additional employees.

"We have been recruiting," said company spokesman Hector Marinez. "This expansion is great news for us and for the Bay Area."

The company expects to occupy the new building by July 2015. "Phase two, the second building, will occur when growth requires it," Marinez said.

Google (GOOG), Apple (AAPL), Facebook, LinkedIn, Samsung, Dell and Amazon unit Lab 126 are among the tech companies that have leased or bought large buildings in the past year or two, or that are planning major new projects for their head offices.

"There is a lot of new construction in Silicon Valley," noted Hedberg. "Rents are higher and they can justify taking an old R&D building, knocking it down, and building a new campus."

Also, technology companies are finding that to compete for top talent they must offer state-of-the-art, sleek new offices for their employees.

"All signs point to the job market in Silicon Valley getting stronger this year, or at least staying stable," Hedberg said.

Contact George Avalos at 408-373-3556 or 925-977-8477. Follow him at Twitter.com/george_avalos.

Nvidia
Headquarters: Santa Clara
CEO: Jen-Hsun Huang
Revenue: $4.28 billion (most recent 12 months)
Profit: $562.5 million (most recent 12 months)
Employees worldwide: 8,000
Employees in Santa Clara: 3,300
Development plans: 1 million-square-foot campus consisting of a pair of 500,000-square-foot buildings
Business: Specialty semiconductors for high-performance graphics and mobile applications
Source: Yahoo Finance