Zoho Plans to Jump into Semiconductor Game, with its $700 Million Outlay

Zoho, the Chennai-based software-as-a-service (SaaS) company, plans to invest in semiconductor manufacturing with a focus on compound semiconductors for specialized applications. The company is considering a $700 million investment in this new venture in Tamil Nadu.

The timeline for Zoho’s semiconductor plant in Tamil Nadu involves the company’s plans to set up a semiconductor design project in rural Tenkasi, southern Tamil Nadu. Initially, Zoho’s co-founder and CEO, Sridhar Vembu hinted towards this initiative through his response to a post by Ananthan Ayyasamy, a semiconductor expert and former Intel employee from Tenkasi. 

The project aimed to create advanced chip design expertise in the region and leverage Ananthan’s unrivaled expertise in semiconductor design.  Zoho’s initial plans for this venture included planning and establishing the semiconductor design project in Tenkasi, aligning with India’s ambitious mission to become a major hub for semiconductors.

Current State of the Indian Semiconductor Industry

The current state of the Indian semiconductor industry is marked by significant progress and growth positioning India as a potential global hub for chip manufacturing. The Indian semiconductor market reached a value of US$34.3 billion in 2023 and is projected to reach US$100.2 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 20.1% during the forecast period.

The Indian government has approved the establishment of three new semiconductor manufacturing facilities increasing the country’s allocation for semiconductor and display manufacturing schemes to support the industry’s growth. The growing popularity of electric vehicles (EVs) in India is expected to drive semiconductor use in various fields including safety, electrification, communication, and networking.

India is actively seeking foreign investments in its semiconductor industry focusing on the development and design of fabs and ATMP (Assembly, testing, Marking, and Packing) facilities. The establishment of new semiconductor manufacturing units in India is expected to create 20,000 high-tech positions and indirectly generate an additional 60,000 jobs contributing to the growth of the semiconductor industry and the economy.

Conclusion

Overall,  Zoho’s semiconductor plant is expected to contribute to the growth and development of India’s semiconductor industry while aligning with the government’s vision of making India a global semiconductor manufacturing destination.

Zoho’s foray into semiconductor manufacturing is part of its broader strategy to become a “holistic technology company” with both software and hardware integrated, along with data centers and cloud infrastructures.