Zoho Pauses $700M Chip Plan, Hindering India’s Tech Push
Zoho has paused its $700 million semiconductor project due to the lack of a tech partner, dealing a setback to India’s chipmaking goals. Learn why this decision reflects broader challenges in India’s high-stakes semiconductor mission.
Zoho’s $700M Semiconductor Setback Stalls India’s Chip Dreams
In a significant jolt to India’s semiconductor aspirations, tech giant Zoho has put the brakes on its ambitious $700 million venture into chip manufacturing. The Chennai-based software company, long admired for its self-funded global rise, has shelved its semiconductor facility plan in Karnataka due to a lack of a qualified technology partner—an essential ingredient in the complex world of chip fabrication.
The decision casts a shadow over India’s broader efforts to position itself as a key player in the global semiconductor supply chain. It also underscores the intricate and often unforgiving dynamics of building a chipmaking ecosystem from scratch.
A Vision Paused Before Takeoff
Zoho’s semiconductor journey began with promise and patriotism. With a valuation hovering around $12 billion, the company set its sights on Mysuru in Karnataka as the site for its state-of-the-art facility. The proposed plant, under a newly formed subsidiary named Silectric Semiconductor Manufacturing, was expected to generate around 460 jobs and make India less reliant on foreign chipmakers.
Sridhar Vembu, Zoho’s co-founder and a vocal advocate for tech sovereignty, had been a strong proponent of this endeavor. He envisioned semiconductors as the next frontier in India’s digital transformation and innovation economy.
But as months rolled by, a crucial piece of the puzzle remained elusive: a seasoned technology partner. Despite a year-long search, Zoho couldn’t strike a deal with any major chipmakers that would provide the technical know-how needed for the venture. According to sources familiar with the matter, this lack of collaboration ultimately forced the company to freeze its plans indefinitely.
Not an Isolated Case
Zoho’s predicament is not unique. India’s semiconductor push has encountered several roadblocks in recent months. Most notably, the Adani Group reportedly paused its $10 billion chip project with Israel’s Tower Semiconductor due to similar uncertainties surrounding collaboration and execution.
Despite government incentives, including a $10 billion production-linked incentive (PLI) scheme aimed at attracting global chipmakers, the industry continues to struggle with a foundational issue: the lack of ecosystem maturity. From skilled labor and advanced infrastructure to deep technical expertise, India still lags behind semiconductor giants like Taiwan, South Korea, and the U.S.
Karnataka’s Stake and Silence
In December 2024, the Karnataka government formally approved Zoho’s Mysuru facility. With the potential to catalyze local economic development, the project had generated buzz within India’s tech circles. But the government has remained silent following news of the suspension—leaving questions about whether it will step in to salvage or revive the initiative.
Industry experts suggest that public-private partnerships, stronger diplomatic outreach to tech-rich countries, and aggressive investment in R&D will be critical if India hopes to avoid further stumbles.
A Race Against Time and Talent
The urgency is real. As global tensions and supply chain disruptions continue to reshape the tech landscape, countries are racing to secure chip independence. India, with its massive market and growing digital economy, has every reason to aim for semiconductor self-reliance. But vision alone won’t cut it.
“India needs more than capital—it needs capability,” says Ankit Jain, a semiconductor policy analyst at the Centre for Innovation Policy. “Without deep technical ties and long-term strategy, these projects risk becoming high-profile headlines with no follow-through.”
Looking Ahead
While Zoho has not ruled out reviving its chip dreams in the future, its pause is a cautionary tale. Building a semiconductor industry isn’t just about ambition or investment—it’s about cultivating partnerships, securing talent, and mastering a technology that’s both intricate and evolving at warp speed.
India’s path to becoming a global chip powerhouse may still be viable, but as Zoho’s setback illustrates, it will be a long road paved with persistence, collaboration, and patience.
Conclusion:
Zoho’s withdrawal from semiconductor manufacturing is more than a company decision—it’s a barometer of India’s readiness in a fiercely competitive domain. As global tech powers double down on domestic chip production, India must recalibrate its strategy with urgency and realism. Without the right partners and foundational strength, even billion-dollar dreams risk fizzling out before they ever power up.
Disclaimer:
This article is based on publicly available information and reports, including insights from unnamed sources. The views expressed do not reflect any endorsement by Zoho or government entities mentioned. Readers are encouraged to verify details from official sources where necessary.
source : The Financial Express