Software firm Zoho to foray into chipmaking, seeks govt incentive: Report
New Delhi: Indian software firm Zoho is considering venturing into chipmaking and is seeking incentives from the central government, Reuters reported citing two sources familiar with the proposal.
One of the sources mentioned an investment plan of $700 million.
Established in 1996 and headquartered in Tamil Nadu, India, Zoho provides software and related services on a subscription basis to businesses in 150 countries, competing with industry giants like Microsoft and Salesforce.
Joining a slew of companies seeking government support to establish chip fabrication plants, Zoho aims to manufacture compound semiconductors, which have specialized commercial applications and are crafted from alternatives to the commonly used silicon.
The proposal is currently under review by the panel overseeing India's chip initiatives at the IT ministry. The ministry has requested further clarification from Zoho regarding its prospective clientele.
While Zoho declined to comment on the matter, the IT ministry has yet to respond to inquiries, said the report.
The company estimates an investment of $700 million and has also identified a technology partner to aid in establishing the operation from scratch.
In March, Zoho's founder and CEO Sridhar Vembu hinted at a chip design project in Tamil Nadu, although details were not provided. This diversification into chip manufacturing is a new development for Zoho.
According to media reports, Zoho generated annual revenue of over $1 billion in the financial year ending March 2023.
In February, India approved the construction of three semiconductor plants valued at over $15 billion by firms such as Tata Group and CG Power, with plans to produce and package chips for sectors including defense, automobiles, and telecommunications.
India expects its semiconductor market to reach $63 billion by 2026.
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