Zoho Puts $700 Million Chip Plant Plan on Hold Amid Tech Concerns

Zoho Corporation has decided to pause its $700 million plan to set up a semiconductor fabrication plant due to uncertainties in technology and the high-risk nature of the industry. Sridhar Vembu, the company’s founder, shared on social media that they were not confident in the current technology path and did not want to proceed without that assurance—especially when government support and taxpayer money are involved.

The software company from Tamil Nadu had applied for incentives under the India Semiconductor Mission (ISM) in June 2023 and had even formed a new entity called Silectric Semiconductor Manufacturing to lead the project. Before this, Zoho had also announced plans to launch a chip design initiative in Tenkasi, as part of its goal to join India’s emerging semiconductor ecosystem.

The ISM, with a budget of ₹76,000 crore, aims to support local chip production. So far, five projects have been approved—mostly for chip packaging. Tata Electronics’ chip fabrication plant in Dholera, Gujarat, is the only one cleared for manufacturing and is expected to start by 2027.

Zoho’s cautious move highlights the complex and uncertain journey ahead for private companies entering India’s chip-making space. The company hasn’t ruled out future investments once a clearer path emerges.

Source: CNBC TV18