Zoho halts semiconductor project citing tech uncertainty: Report

Zoho Corporation has suspended its semiconductor manufacturing plans, including a proposed $400 million facility in Karnataka, after a year-long evaluation. 

According to a Reuters report, the decision was confirmed by co-founder Sridhar Vembu, who cited a lack of confidence in the required technology and concerns about using public funds without a clear technical roadmap.

The company had formed a subsidiary, Silectric Semiconductor Manufacturing, and made initial hires to pursue the project. However, it could not secure a suitable technology partner to guide the complex chipmaking process.

The Karnataka government had approved Zoho’s proposal in December 2024. The plant was expected to create 460 jobs in the Mysuru region and would have been the state's first semiconductor unit.

Zoho’s withdrawal follows reports that the Adani Group has also paused a $10 billion semiconductor plan in partnership with Israel’s Tower Semiconductor.

India currently does not operate any semiconductor fabrication facility. The government has been offering financial incentives to attract private investment in this space, aiming to reduce reliance on imports.

Zoho, a software company with a global customer base in 150 countries and over 18,000 employees, had planned the chip project as part of its diversification efforts.