Zoho seeks licence to build $200M semiconductor plant in Chennai

Chennai-based Zoho Corp. has applied for a licence to build a compound semiconductor fabrication plant, committing $200 million to the project. According to two senior industry officials, this compound fab project is expected to attract around $600 million in net investment and will involve a technology partner.

Sridhar Vembu, co-founder, and chief executive of Zoho Corp, announced at the company’s annual event in Texas, US, that the license application has been submitted, and they are currently awaiting government clearance. A formal announcement will follow upon approval. Vembu added that Zoho is hopeful the government will co-finance the project under the compound semiconductor manufacturing scheme.

One of the officials disclosed that Zoho’s fab project aims to bring Silicon carbide (SiC) chip manufacturing to Tamil Nadu, with plans to license the technology from Clas-SiC, a Scotland-based company.

Subsidies for compound semiconductor fabs are part of the Indian government’s initiative to develop the semiconductor and display manufacturing ecosystem, with guidelines revised in June 2023. Under this scheme, applicants for a fab can receive fiscal support covering 50% of their capital expenditure if they meet a specified capex threshold.

Silicon carbide chips are used in various industrial applications, including electric vehicles (EVs). In October, Vembu revealed that Zoho is exploring investments in advanced chemistry cells, the core components of batteries used in electronics and EVs.

“This space is under exploration, and discussions are underway with some stakeholders. While it’s premature for an announcement, there is a requirement to develop deep tech and manufacturing capabilities in India. The advanced cell chemistry production-linked incentive (PLI) schemes also present substantial potential. Individuals with experience in cell R&D are being sought, and discussions with some candidates are presently ongoing”, Vembu said. Eletimes