Software company Zoho, aiming to tap into India's aspirations to become a global semiconductor player, has applied with a partner to set up a semiconductor manufacturing facility in India. Co-founder Sridhar Vembu confirmed the move, citing a stringent evaluation process. The initiative aligns with India's semiconductor manufacturing incentive plan.

Zoho has applied to the government to set up a semiconductor manufacturing facility in India along with a partner, co-founder Sridhar Vembu said, aiming to tap into the country’s aspirations to become an important cog in the global supply chain.

“We have applied with a partner, but the approval is yet to come. There is a stringent evaluation process,” Vembu told ET, without divulging details.

Vembu’s comment confirms recent media reports of Zoho’s interest in the segment. A recent media report said Zoho was planning to make a foray into the chip-making segment and has sought government sops and had proposed an investment of $700 million.

The Chennai-headquartered company, which provides software as a service and competes with the likes of US giant Microsoft, is the latest name among companies aiming for government incentives to get a pie of the lucrative semiconductor space.

In total, India now has four approved semiconductor chip manufacturing and assembly plants, of which three are chip packaging and assembly units while the one chip manufacturing unit is being set up by the Tata Group-PSMC Group joint venture.

In December 2021, India made the first effort towards setting up from scratch a semiconductor manufacturing ecosystem in the country, when it approved a Rs 76,000 crore incentive plan for applicants.

Though the plan initially had a layered incentive structure for applicants based on whether they applied for chip manufacturing, OSAT or ATMP unit, it was later revised to give a flat 50% central subsidy to successful applicants based on the fulfilment of objectives.

Vembu termed moves by global tech companies to lay off people just to keep the profit numbers sharp as “too short-sighted”, adding that the culture should not develop in India.

Over the past many months, tech firms including Google, Microsoft, Meta, Amazon and Tesla have laid off thousands of employees. The firings come after a surge in hiring during the pandemic amid exceptional growth of technology companies.

Commenting on the layoffs, Vembu said there’s an economic reason for it as sometimes the business is going south and there is no revenue, and a company lays off people as there’s no other way unless the government or somebody else pays the salary.

“When there is a layoff when a company missed only one quarterly profit and they do it just to keep the number sharp. That's something I criticise as it’s not good, that's not a culture that we definitely don’t want to develop in India,” he said.

The Zoho CEO termed such companies as too short-sighted. “In the long term, it’s not smart because you are destroying employee morale, you are destroying loyalty. You have to demonstrate loyalty to earn the loyalty. In the long-term, there's no assets other than employees in any of the companies,” Vembu added.

Zoho did not lay off a single person throughout the pandemic and later.

The global tech company has over 15,000 employees across different countries and primarily competes with Microsoft. Zoho has over 55 apps for every business category.

During its annual event—Zoholics—the company has announced a few updates related to its products.

Vembu further said that the tech industry is going too fast to roll out artificial intelligence (AI) features. “Because nobody wants to fall behind, there is a rush going on,” he said, adding it's also limiting the adoption.

Zoho has also integrated some AI features into its apps, enhancing productivity and making the process smooth.

Vembu said Zoho is establishing a manufacturing facility in Tamil Nadu to produce handheld tools, in a bid to create rural employment.

“We want to create rural jobs in manufacturing as we are importing all these handheld tools used by the carpenters, electricians, construction workers, plumbers etc. In two-three weeks, the factory will start as the machinery is ready,” Vembu said.

Currently, some youths are being imparted training and good wages will be paid to the local youth so that a livelihood can be created, and migration can be arrested.

(With Agency Inputs)