Zoho Halts Ambitious $700 Million Chip Manufacturing Plan in India

Zoho Corporation has paused its $700 million semiconductor manufacturing plan, citing uncertainty in technology pathways and capital demands. This decision impacts India's efforts to foster a domestic chip industry. The move follows another pause by Adani Group on a similar venture, affecting India’s chipmaking ambitions.

In a significant setback to India's chip manufacturing ambitions, software behemoth Zoho Corporation has announced halting its ambitious $700 million investment in semiconductor production. Zoho's Co-founder and CEO, Sridhar Vembu, cited uncertainties in choosing the right technology path and the substantial capital required as the reasons for this decision.

Vembu took to social media platform 'X' to elaborate, stating, "Given the capital-intensive nature of semiconductor manufacturing and the necessity for government backing, we wanted assurance in our technological direction before involving taxpayer money. Lacking that confidence, our board opted to shelve the project until a superior technological approach is identified."

Zoho originally intended to inject $400 million into a semiconductor facility in Karnataka, projected to generate 460 jobs. This pause arrives amid broader challenges, as the Adani Group also ceased its $10 billion chip manufacturing project in collaboration with Israel's Tower Semiconductor. The Indian government's ongoing support signifies its determination to establish a domestic chip ecosystem, as seen with Tata Electronics' groundbreaking agreement to build the nation's first commercial semiconductor fab in Gujarat under the India Semiconductor Mission.

(With inputs from agencies.)