Zoho Corporation Halts Semiconductor Manufacturing Plans

Zoho Corporation has decided to halt its semiconductor manufacturing initiatives, which included plans for a $400 million facility in Karnataka, following a thorough year-long evaluation. This decision has been detailed in a report by Reuters, confirmed by co-founder Sridhar Vembu, who mentioned a deficiency in confidence regarding the necessary technology and reservations about utilising public funds given the absence of a definite technical strategy.

The company had established a subsidiary named Silectric Semiconductor Manufacturing and initiated the recruitment process for the project. However, it faced challenges in finding a suitable technology partner to navigate the intricate chipmaking landscape.

Karnataka’s Approval and Job Creation Potential

The Karnataka government had greenlit Zoho’s proposal in December 2024, anticipating the establishment of the plant to generate approximately 460 job opportunities in the Mysuru area. This facility was set to be the state’s inaugural semiconductor manufacturing unit.

Wider Industry Context

Zoho’s decision to withdraw comes in the wake of reports indicating that the Adani Group has also put a hold on a $10 billion semiconductor initiative in collaboration with Israel’s Tower Semiconductor.

At present, India lacks any operational semiconductor fabrication facility. To attract private investment in this critical sector, the government has been offering financial incentives, aiming to diminish dependence on imports.

With a global clientele spread across 150 countries and a workforce exceeding 18,000 employees, Zoho intended the semiconductor project as a component of its diversification strategy.