Zoho Corporation, a global tech company known for its cloud-based software suite, is now gearing up to venture into the semiconductor manufacturing industry. Sridhar Vembu, CEO of Zoho, confirmed that the company has applied to the Indian government to set up a chip manufacturing facility. This move positions Zoho alongside major industry players like Tata Group, Vedanta, and Adani in the race to establish a robust semiconductor industry in India.
Application Submitted, Awaiting Approval
In an interview, Sridhar Vembu revealed that Zoho, in partnership with another company, has submitted an application to the government for approval to build a semiconductor manufacturing facility. The approval process is currently underway, with the government asking stringent questions to ensure the viability and potential success of the project. Although Vembu refrained from naming the partner company, he emphasized that the evaluation process is thorough, and Zoho is awaiting the green light from authorities.
Potential $700 Million Investment in the Chip Plant
Speculation has arisen around the scale of investment Zoho is planning for its semiconductor venture, with reports suggesting a figure of $700 million. When asked about this potential investment, Vembu chose to remain tight-lipped, stating that further details would be shared once the project receives formal approval. This level of investment underscores the seriousness with which Zoho is approaching this new endeavor, marking a significant expansion of its business portfolio.
Government Support Through Semiconductor Mission
The Indian government has launched the Semiconductor Mission to bolster domestic semiconductor manufacturing, offering subsidies and support to companies willing to invest in this critical industry. Vembu acknowledged that while the government’s policies are clear, any financial assistance will be contingent upon a rigorous evaluation of the project. The focus is on acquiring the necessary technology and expertise from global vendors, a process that requires careful planning and negotiation.
Challenges in Acquiring Technology
One of the major hurdles in setting up a semiconductor plant is sourcing the technology. Vembu pointed out that most of the critical technologies needed for semiconductor manufacturing are not available in India. Zoho will have to collaborate with vendors from countries like the USA, UK, Taiwan, Singapore, and Japan to acquire the necessary components and expertise. This complex network of partnerships and technology transfers is a key factor in the project’s timeline and overall success.
Strategic Location for the Plant
Choosing the right location for the semiconductor plant is another crucial aspect of the project. Vembu highlighted the importance of selecting a site with abundant water and electricity, two essential resources for semiconductor manufacturing. He mentioned that the company is still in the early stages of this process and is carefully considering various factors before finalizing a location.
Zoho Launches Vikra App on ONDC
In addition to its semiconductor ambitions, Zoho recently launched Vikra, a seller app on the government-backed Open Network for Digital Commerce (ONDC). The app is designed to help small businesses create and manage custom Internet of Things (IoT) solutions. Businesses using Vikra will pay a 1% fee on sales made through the platform, offering an affordable and scalable solution for digital commerce.
Zoho’s entry into the semiconductor industry could be a game-changer, adding a new dimension to India’s growing tech ecosystem. With significant investments and a clear strategic vision, the company is poised to make a substantial impact in the years to come.
