Zoho suspends plans for $700 million semiconductor plant

Citing technological uncertainties, Zoho Corporation has shelved its ambitious $700-million plan to build a compound semiconductor fabrication plant. The decision was announced by the company’s founder and chief scientist Sridhar Vembu on X. The Tamil Nadu-based software-as-a-service (SaaS) firm had applied in June 2023 for incentives under the India Semiconductor Mission (ISM) to support the proposed fabrication unit, while also incorporating a new entity, Silectric Semiconductor Manufacturing.

The Karnataka government had also approved the plan last December, calling it a landmark project that would have created 460 jobs in the Mysuru region, according to reports.

The move comes as a setback not just for the company, but also to India’s bigger dream of becoming a global hub for semiconductors. 

Vembu wrote on X, “On our semiconductor fab investment plan, since this business is so capital intensive it requires government backing, we wanted to be absolutely sure of the technology path before we take taxpayer money.”

“We did not have that confidence in the tech so our board decided to shelve this idea for the time being, until we find a better tech approach,” he added.

Vembu has stated that since chipmaking is very costly and needs government support, the company didn’t want to move ahead unless they were sure about the technology, especially when taxpayer money is involved.

In another news report yesterday, the Adani Group has also paused its $10 billion chip project with Israel’s Tower Semiconductor, after reviewing it internally.