Indian software giant Zoho has put a pause on its ambitious $700 million venture into semiconductor manufacturing, according to sources familiar with the development. The decision marks a setback for India’s efforts to establish itself as a global semiconductor hub.
The Chennai-headquartered firm, known for providing affordable alternatives to software tools from companies like Microsoft, struggled to secure a suitable technology partner to help navigate the complexities of chip production, one source revealed.
The move comes shortly after another major blow to India’s semiconductor dreams—billionaire Gautam Adani’s conglomerate also reportedly suspended its $10 billion chip venture with Israel’s Tower Semiconductor following an internal review, according to a Reuters report.
Zoho, which is currently valued at approximately $12 billion, had planned to invest $400 million in setting up a chip fabrication unit in Karnataka’s Mysuru region. The facility, if completed, was expected to generate around 460 jobs and become a landmark project for the state.
Company co-founder Sridhar Vembu, widely recognized for his unconventional approach of operating out of rural India, has previously emphasized the importance of building domestic technological capabilities, calling semiconductors crucial to national interests.
Despite forming a dedicated board under its Silectric Semiconductor Manufacturing arm and initiating early hires last year, the company has now indefinitely suspended its semiconductor initiative. Whether Zoho will revive the project in the future remains uncertain.
Karnataka’s state government had earlier announced approval of the project in December 2024. However, government officials have not responded to recent requests for comment. Zoho also declined to provide an official statement.
India, despite its push under Prime Minister Narendra Modi’s administration, still lacks an operational semiconductor fabrication plant, and Zoho’s withdrawal represents another hurdle in its ongoing efforts to attract major investments in the sector.
Founded in 1996, Zoho serves over 120 million users across 150 countries and employs more than 18,000 people globally.
