The SaaS giant has offered the Center an investment proposal worth $700 million to establish a chip fabrication facility in India.
With the goal of producing compound semiconductors, Zoho has already chosen a technology partner and established the unit.
Cofounder Sridhar Vembu stated earlier in March that the business is preparing a semiconductor design project in Tamil Nadu’s Tenkasi region.
According to reports, the Sridhar Vembu-led SaaS unicorn Zoho is seeking to break into the semiconductor industry. To that end, the company has asked to the Center to be granted permission to obtain incentives for establishing a chip fabrication factory under the production linked incentive (PLI) program.
To establish the unit, the bootstrapped business expects to invest about $700 million, according to sources cited by Reuters.
According to a source cited in the paper, “Zoho is proposing to manufacture compound semiconductors, which have specialized commercial applications and are made from alternatives to the more commonly used silicon in chipmaking.”
The IT ministry is currently reviewing the company’s request. Additionally, the government has asked Zoho to provide more information about the clients it plans to work with.
The report further stated that Zoho had already chosen a tech partner to establish the chip production plant, citing one of the sources.
When asked about the development by Inc42, Zoho declined to comment.
The most recent event occurred nearly two months after Vembu announced in an X post that Zoho was preparing a semiconductor design project in the Tamil Nadu district of Tenkasi.
The announcement that Zoho intends to enter the semiconductor industry is also very encouraging for the government, which has launched several programs to encourage the nation’s semiconductor industry.
Under the Semicon India initiative, the Center allocated INR 76,000 Cr to build up the nation’s semiconductor and display manufacturing industry.
The nation’s first semiconductor factory, to be established by the Tata Group in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC) and with a net investment of INR 91,000 Cr, was approved by the union cabinet earlier this year in February.
Additionally, it approved two more semiconductor proposals from Japan’s Renesas and Tata Semiconductor Assembly and Test Pvt Ltd (TSAT), as well as CG Power.
India’s semiconductor sector is predicted to reach $150 billion in size by 2030, expanding at a compound annual growth rate (CAGR) of 24% between 2023 and 2030, according to Inc42 data.
Despite the high capital requirements of semiconductor manufacture, the wealthy Zoho is not expected to face these difficulties. In the fiscal year 2022–2023 (FY23), the company’s operating sales soared 30% year over year to INR 8,703.6 Cr ($1 Bn), while net profit increased 3% to $340 Mn.
