Zoho Applies for $700M Semiconductor Facility in India
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Zoho’s Ambitious Semiconductor Venture
Zoho has recently taken a significant step towards entering the semiconductor industry by applying for government approval to establish a semiconductor manufacturing facility in India. This initiative, in partnership with another entity, aligns with India’s strategic goal of becoming a key player in the global semiconductor supply chain. Co-founder Sridhar Vembu confirmed this development, noting that the application is pending approval.
Strategic Move in the Semiconductor Sector
This announcement comes amid recent media reports suggesting Zoho’s interest in semiconductor manufacturing. The Chennai-based tech company, which competes with industry giants like Microsoft, has proposed an investment of $700 million for this venture. By seeking government incentives, Zoho aims to join the growing list of companies looking to capitalize on the lucrative semiconductor market.
India’s Growing Semiconductor Ecosystem
Currently, India hosts four authorized facilities for semiconductor production and assembly. These include a chip manufacturing plant by a joint venture between Tata Group and PSMC Group, and three other chip packaging and assembly units. In December 2021, the Indian government launched a substantial Rs 76,000 crore incentive program to build a semiconductor manufacturing ecosystem from scratch. This initiative, initially featuring a tiered incentive structure, now offers a flat 50% central subsidy for qualifying projects.
Employment and Economic Considerations
Sridhar Vembu also addressed broader industry practices, criticizing global IT companies for terminating employees merely to maintain profit margins. He argued that such short-term measures could be detrimental and advised against their adoption in India. To support job creation in rural areas, Zoho is also setting up a manufacturing plant in Tamil Nadu to produce handheld tools.
By venturing into semiconductor manufacturing, Zoho is not only seeking to diversify its business but also contribute to India’s aspirations of becoming a major hub in the global semiconductor industry.