Thursday, May 23, 2024

This mid-size Indian IT company may be planning to enter chip-making – Times of India

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Indian mid-size IT firm Zoho is reportedly planning to start manufacturing semiconductors in the country. According to a report by the news agency Reuters, two sources with direct knowledge of the matter have claimed that the company has been seeking government incentives and has even made proposals.
One of the sources also said that Zoho is also planning to invest $700 million in this alleged chip manufacturing plant and has also identified a tech partner to help set up the operation from scratch.However, the source didn’t confirm the name of Zoho’s tech partner.
Tamil Nadu-based Zoho which offers software and related services on subscription to businesses in 150 countries was founded in 1996. The Indian IT company competes with the likes of Microsoft and Salesforce, who also offer similar services. This makes Zoho the latest company to seek financial help from the government to set up a chip fabrication plant.

Zoho’s chip-making plans: What are compound semiconductors

As per the report, Zoho is planning to manufacture compound semiconductors. The sources said that these chips have specialised commercial applications and are made from alternatives to the more commonly used silicon in chipmaking.

The report also added that the panel that drives India’s chip initiatives at the IT ministry is currently reviewing the company’s proposal. Meanwhile, another source noted that the IT ministry has asked Zoho to provide more clarity on the customers it intends to do business with.

In March, Zoho’s founder and CEO Sridhar Vembu said that the company was planning a chip design project in Tamil Nadu. However, Vembu didn’t share any details and the company’s plans to diversify into chip manufacturing weren’t reported earlier.
In the financial year that ended March 2023, Zoho reportedly made an annual revenue of over $1 billion. India’s semiconductor market is also expected to be worth $63 billion by 2026.
The government also approved the construction of three semiconductor plants in February. These plants will be worth over $15 billion and will be built by companies including Tata Group and CG Power. In these plants, the companies are planning to manufacture and package chips for various sectors including defence, automobiles and telecommunication.

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