Zoho is embarking on an ambitious venture into chip manufacturing with a proposed investment of $700 million, the company is actively seeking support and incentives from the government to bring this vision to life.

Zoho, established in 1996 and now headquartered in India's 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 specialized commercial applications and are made from alternatives to the more-commonly used silicon in chipmaking, the two sources said.