Zoho was planning a foray into chipmaking and seeking incentives from the Central government, two sources with direct knowledge of the proposal said on Thursday, with one of them pegging the investment plan at $700 million.

Zoho, established in 1996 and now headquartered in Tamil Nadu, offers software and related services on subscription to businesses in 150 countries, competing with the likes of Microsoft and Salesforce.

It is the latest company to seek financial sweeteners from the government to set up a chip fabrication plant.

Semiconductors are a key plank of India’s business agenda, with a $10-billion package in place to boost the industry as it hopes to compete with countries such as Taiwan in a few years.

Zoho is proposing to manufacture compound semiconductors, which have specialised commercial applications and are made from alternatives to the more-commonly used silicon in chipmaking, the two sources said.

The proposal was being reviewed by the panel that drives India’s chip initiatives at the IT Ministry, they added. The ministry had sought more clarity from Zoho on the customers it intended to do business with, the second source said.

Zoho declined to comment, while the IT Ministry did not immediately respond to a request.