Zoho, the Indian software firm, has decided to pause its ambitious $700 million chipmaking project, confirming the setback for both the company and India’s broader goal of becoming a global semiconductor hub. The company had aimed to set up a $400 million semiconductor plant in Karnataka but faced challenges finding the right technology partner to navigate the complexities of chip production.
Sridhar Vembu, Zoho’s CEO, confirmed the decision on X (formerly Twitter), explaining that the project was too capital-intensive and would require government backing. Vembu emphasized that Zoho did not have the necessary confidence in the technology to proceed with the investment, especially given the involvement of taxpayer money. He stated that the board had decided to shelve the plan until a more reliable technology path could be identified.
The project had already gained approval from the Karnataka government in December, marking it as a potential landmark initiative that would have created 460 jobs in the Mysuru region. Zoho had also set up a dedicated team, Silectric Semiconductor Manufacturing, and had begun hiring for the initiative.
This pause in Zoho's project reflects a broader challenge for India’s semiconductor ambitions. The country is aiming to establish itself as a key player in global semiconductor production, but technical, financial, and strategic obstacles continue to hinder progress.
Additionally, the Adani Group also paused its $10 billion chipmaking venture with Israel’s Tower Semiconductor after conducting an internal review, further underscoring the difficulties in the semiconductor industry.
While both projects faced challenges, they represent a larger trend of India’s attempts to build a self-sufficient semiconductor ecosystem, an endeavor that will likely require significant technological breakthroughs, investment, and government support.
