Zoho to take 'hub-and-spoke' model to Uttar Pradesh's small towns in 2026: Sridhar Vembu

Zoho founder Sridhar Vembu

• Zoho to announce expansion in Uttar Pradesh this year under hub-and-spoke model
• Semiconductor fabrication plans paused; focus remains on design and AI strategy
• Zoho resumes north India growth after a year and a half pause

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Zoho will announce its expansion in Uttar Pradesh this year as part of its hub-and-spoke model, founder and chief scientist Sridhar Vembu told Moneycontrol, marking the company’s return to its north India growth plans after a pause of nearly a year and a half.

“This year we will announce our expansion in Uttar Pradesh,” Vembu said, explaining that the company had temporarily slowed new regional projects to focus on navigating rapid changes driven by artificial intelligence.

“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.

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.

The Uttar Pradesh move is expected to follow Zoho’s hub-and-spoke model, similar to its centres in smaller towns such as Tenkasi and Kumbakonam in Tamil Nadu.

Separately, Vembu said Zoho continues to invest in semiconductor design but has put its semiconductor fabrication plant plans 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.

He added that building a chip fabrication unit is a capital- and resource-intensive exercise, and the company wants to prioritise its core software and AI strategy before taking on such a large-scale project.

Zoho’s semiconductor design efforts remain part of its long-term roadmap, but manufacturing will wait until the company has greater clarity and bandwidth.

The model was first implemented in Tenkasi in 2011, which later grew into one of Zoho’s most important development centres outside Chennai. Madurai functions as another regional hub within Tamil Nadu.

Beyond Tamil Nadu, Zoho has expanded this approach to Andhra Pradesh, with Renigunta acting as a key centre, and has also begun building its presence in Uttar Pradesh, where the company has indicated that more focused expansion plans will follow.

The company has also set up operations in parts of Kerala, including smaller towns, in line with its decentralisation strategy.

Zoho has consistently said a significant portion of its workforce in such centres is hired locally, supported by internal training programmes such as Zoho Schools of Learning instead of conventional campus recruitment.