From Software To Chips: Zoho Seeks Government Nod For $700 Million Semiconductor Manufacturing Plant In India

Zoho has applied to the government to establish a semiconductor manufacturing facility in India in collaboration with a partner, according to co-founder Sridhar Vembu.

However, the approval for the Chennai-based software firm's proposal is ye to come.

"We have applied with a partner, but the approval is yet to come. There is a stringent evaluation process," Vembu, co-founder and CEO of Zoho, was quoted as saying by Economic Times.

The move comes as the company is aiming to tap into the country’s aspirations to become a significant player in the global semiconductor supply chain.

Vembu's statement also confirms recent media reports of Zoho's interest in entering the semiconductor sector.

A recent media report said that Zoho was planning to venture into chip manufacturing, seeking government incentives and proposing an investment of $700 million.

The Chennai-based company, which offers software as a service and competes with US giant Microsoft, joins other firms aiming to benefit from government incentives in the semiconductor market.

India currently has four approved semiconductor chip manufacturing and assembly plants.

Of these, three are chip packaging and assembly units, while the sole chip manufacturing unit is being established by the Tata Group-PSMC Group joint venture.

In December 2021, India begin efforts to build a semiconductor manufacturing ecosystem from the ground up by approving a Rs 76,000 crore incentive plan for applicants.

Initially, the plan offered a layered incentive structure based on whether applicants sought to establish chip manufacturing, OSAT, or ATMP units.

However, it was later revised to provide a flat 50 per cent central subsidy to successful applicants who meet the required objectives.

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