AMD moving headquarters to Santa Clara, ending 47-year history in Sunnyvale

August 19, 2016

Advanced Micro Devices is moving its headquarters from Sunnyvale to Santa Clara, bringing 775 jobs to the growing corporate node at Highway 101 and Bowers Avenue.

The chip company signed a long-term deal this week with the Irvine Company for a 220,000-square-foot building being constructed at Santa Clara Square, the mixed-use megacenter that includes office, a Whole Foods-anchored retail center and, soon, nearly 2,000 apartments. It’s the first time in 47 years that AMD has not been headquartered in Sunnyvale.

“One of the reasons is our footprint is pretty large at One AMD Place,” said Bill Montague, AMD’s director of global real estate, project management and workplace services, in an interview. “It’s not as efficient we can achieve with the relocation. And the age of the (existing) site would have required a significant upgrade to renovate it.”

The deal comes just weeks after Irvine Company paid $175 million to property owner W.P. Carey for the sprawling, 319,000-square-foot campus in Sunnyvale that has housed AMD for decades. Irvine is expected to propose redeveloping the 32.5-acre campus for apartments.

Now Irvine is adding AMD to its mixed-use hub that recently welcomed Ericsson in two buildings and earlier this summer signed Cambridge Industries Group with a 75,000-square-foot lease.

But AMD executives said that Irvine’s acquisition of its longtime headquarters had nothing to do with the decision to move — or to lease from Irvine. AMD’s lease in Sunnyvale ran through the end of 2018, and the chipmaker had two 10-year renewal options.

“There was no consideration with them being the landlord,” Montague said. “We were looking at sites that worked with our timing, and there were several. One of the criteria was we wanted to have our own building.”

The move comes at an interesting time for AMD, whose struggles for relevance have defined the company for years as it battled Intel on the CPU front and Nvidia on graphics processors.

But the company has had a string of good news thanks to strong sales in the video game industry. This week, AMD unveiled its “Zen” microarchitecture that PCWorld said“could put the company back into the fight with Intel’s best.”

Patrick Moorhead of Moor Insights & Strategy called the new chips “very compelling on performance” in a research note, adding: “All of this sounds incredibly positive. There’s a lot of execution between now and launch, but at a minimum, I believe AMD will be in a much better position than they have been in years in processors.”

AMD’s stock closed at $7.04 on Thursday, near a 52-week high. On Friday, the shares had soared about 9 percent higher to $7.68 by around 11:20 a.m. PDT. By market’s close AMD shares were at $7.62.

While the new headquarters building is smaller than the existing Sunnyvale site, AMD executives said it would actually give them room to grow because the current HQ is not all being used and is not very efficient.

“We’ve been assessing the corporate headquarters site for some time now,” Montague said. “What do we want to do, renew or relocate?”

The company’s site-selection process started with drawing a circle, with a 10-mile radius, around Sunnyvale. “One of the important decisions was location,” Montague said. “We didn’t want to change the location — we wanted to stay relatively close to our existing HQ.”

AMD liked the large floor plates at Santa Clara Square and the large mechanical and electrical capacity, proximity to freeways and amenities. Terms of the deal weren’t disclosed.

Another must-have? A single building.

“We didn’t want to be a tenant in a multi-tenant building,” Montague said. “It was important to create our own identity.”

Added Denise Gourlay, corporate VP of global regional finance and real estate: “We have to be very careful: We’re a tech company and we have to be extremely sensitive to our IP.”

The new building, at 2485 Augustine Drive, will have a fitness center and cafeteria, but officials said they were just starting to assess the workplace design strategy. They have retained the architecture firm Gensler to design the space.

The facility is currently under construction and AMD expects to move in during the second half of 2017.

In a statement, AMD paid homage to its Sunnyvale roots and said the city “will remain a prominent fixture in AMD’s rich history.”

Sunnyvale spokeswoman Jennifer Garnett said earlier this spring that AMD has been “very engaged with our community” and that the company was “an instrumental partner in developing our Columbia Neighborhood Center in north Sunnyvale,” where employees regularly volunteer for the monthly Family Harvest food distribution program.

When complete, Santa Clara Square will include a whopping 1.7 million square feet of office space, 1,800 apartments and 165,000 square feet of retail on roughly 80 acres.

With this deal done, Irvine still has plenty of space left to lease here. Five 220,000-square-foot office towers are underway with completion staggered between late 2016 and mid 2017. Three 220,000-square-foot buildings are complete, with two of them leased (by Ericsson), one now leased by AMD and part of another by Cambridge Industries Group.

AMD was represented by a Cushman & Wakefield team led by Mike Connor.Mark Schmidt of CBRE represented the Irvine Company.