Zoho eyes chip manufacturing with $700 million investment: Report

Indian software firm Zoho, headquartered in Chennai, Tamil Nadu, is planning to venture into chip manufacturing with an investment of $700 million, as reported by Reuters.

Since its establishment in 1996, Zoho has provided software solutions globally, and this shift towards chip making signals Zoho’s commitment to advancing technology within India.

Zoho’s focus is on producing compound semiconductors specialized for commercial use, with the aim of bolstering India’s presence in high-tech manufacturing. This move aligns with the government’s $10 billion incentive package, targeting semiconductor development akin to leading countries like Taiwan.

The Ministry of Electronics and Information Technology (MeitY) is reviewing Zoho’s proposal, seeking clarity on potential clients and the broader impact on the industry.

While Zoho remains tight-lipped, insiders confirm significant investments and have secured a tech partner for the venture, for operational kick-off.

CEO Sridhar Vembu’s recent post on X (formerly Twitter) hinted at Zoho’s semiconductor venture, though not revealing specifics, emphasized the importance of semiconductor technology for the nation’s growth. He highlighted the government’s support and the need for private investment in vital sectors.

Earlier hints from Vembu about a chip design project in Tamil Nadu foreshadowed Zoho’s entry into chip manufacturing, reflecting a broader trend of Indian firms exploring semiconductor production.

Zoho’s financial prowess, with over $1 billion in annual revenue by March 2023, establishes a strong foundation for this new endeavor.

Furthermore, India’s recent approval for semiconductor plants, with investments exceeding $15 billion, underscores the sector’s critical role in defense, automotive, and telecommunications, as India anticipates a $63 billion semiconductor market by 2026.