Zoho is expanding into Uttar Pradesh in 2026, ending a 1.5-year pause in North India
Semiconductor fabrication plans are suspended to prioritize capital-intensive AI and software research
The "hub-and-spoke" model scales locally, aiming to reverse rural talent drain to major cities
Zoho Plans Expansion in Uttar Pradesh Under its ‘Hubs and Spoke’ Model: CEO Vembu
After an 18-month pause to focus on AI-boosting its software, Zoho is now scaling its rural R&D and semiconductor design
Zoho CEO Sridhar Vembu
Summary
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Zoho founder and chief scientist Sridhar Vembu recently stated the company is set to expand its operations in Uttar Pradesh this year under its hub-and-spoke model, Moneycontrol reported, The move will mark Zoho’s return in north India growth plans after a 1.5 years pause.
Vembu explained that the company is currently focussing on navigating rapid changes driven by AI and had temporarily slowed new regional projects.
He said Zoho believes it is now in a stronger position to both “AI-proof” and “AI-boost” its business, allowing it to resume geographic expansion.
“When you are dealing with something as disruptive as AI, you don’t want too many parallel initiatives running at the same time. Now we feel more confident about how to handle it," he added.
Focus on Semiconductor Design
Zoho’s planned expansion in UP will follow its hub-and-spoke model, similar to how it has built centres in smaller towns such as Tenkasi and Kumbakonam in Tamil Nadu.
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Vembu said the company continues to invest in semiconductor design, but has put plans for setting up a semiconductor fabrication plant on hold. “We are investing in semiconductor design right now. The fab plan has been paused because we have too many things going on, especially with AI. We will revisit it in a couple of years,” he said.
Vembu explained that building a chip fabrication unit is highly capital- and resource-intensive, and that Zoho wants to focus first on strengthening its core software business and AI strategy before committing to such a large-scale project. While semiconductor design remains part of Zoho’s long-term roadmap, manufacturing will be deferred until the company has greater clarity and bandwidth.
Hub and Spoke Model
Zoho first implemented its decentralised model in Tenkasi in 2011, which has since grown into one of its most important development centres outside Chennai. Madurai serves as another regional hub within Tamil Nadu.
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Outside the state, the company has extended this approach to Andhra Pradesh, with Renigunta emerging as a key centre, and has begun building its presence in Uttar Pradesh, where more targeted expansion plans are expected. Zoho has also established operations in parts of Kerala, including smaller towns, in line with its decentralisation strategy.