In a significant boost to India’s semiconductor ambitions, homegrown IT software major Zoho is set to invest millions of dollars in a chip design and manufacturing facility in the country. The Chennai-headquartered cloud software giant is currently seeking incentives under the government's production-linked incentive (PLI) scheme, according to sources with direct knowledge of the matter.

The PLI scheme, part of the Rs 76,000 crore incentive package announced by the Indian government in 2021, aims to catalyze the entire semiconductor value chain including design, manufacturing, packaging, and testing of microchips.

Zoho's Founder and CEO Sridhar Vembu had earlier revealed plans to establish an advanced chip design facility in Tenkasi district, Tamil Nadu. Responding to an X post by BJP leader Ananthan Ayyasamy from Tenkasi, Vembu confirmed their ongoing efforts to initiate a "semiconductor design project" in the district.

India has seen a surge of activities in semiconductor manufacturing over the past few years, with several high-profile announcements. According to the India Cellular and Electronics Association (ICEA), the current electronics manufacturing market, valued at nearly $103 billion, necessitates a semiconductor requirement of $26-$31 billion. As the nation targets $300 billion in electronics production by FY26, the demand for semiconductors is expected to soar to at least $100 billion.

In FY23 alone, India imported integrated circuits (ICs) worth $16.14 billion, with $12 billion allocated solely for mobile phones, indicating the immense demand in the sector. To bolster this growth, Prime Minister Narendra Modi laid the foundation stone for three semiconductor projects worth Rs 1.25 lakh crore in March this year.

Zoho's anticipated investment aligns with India's strategic push to become a global semiconductor hub, promising significant advancements in the nation's technological and economic landscape.