Zoho, the Indian software giant best known for its affordable business tools, has decided to pause its ambitious plan to enter the chipmaking business. The company had been working on a $700 million semiconductor manufacturing project, but now it’s been shelved due to technology concerns, according to co-founder and chief scientist Sridhar Vembu.
What Happened?
Vembu explained the decision in a post on X (formerly Twitter). He said chipmaking is a very expensive business that requires not only massive investment but also strong government support. And before using taxpayer money, Zoho wanted to be absolutely sure about the technology behind the project.
“We did not have that confidence in the tech,” Vembu shared. “So our board decided to shelve this idea for the time being, until we find a better tech approach.”
Earlier reports suggested that Zoho struggled to find a suitable technology partner who could guide them through the highly complex chip manufacturing process. That lack of expert support added to their doubts.
The Original Plan
The chip project was part of Zoho’s strategy to diversify its business. They had announced a $400 million investment to set up a chip manufacturing facility in Karnataka, which was expected to create 460 new jobs. It would have been the first chipmaking unit of its kind in the state.
To lead this effort, Zoho had even created a new subsidiary called Silectric Semiconductor Manufacturing, formed a board, and hired a small team.
About Zoho
Zoho is a privately held software company valued at around $12 billion. It’s famous for offering cost-effective alternatives to tools from giants like Microsoft. The company has over 120 million users in 150 countries, with a global workforce of 18,000+ employees.
Sridhar Vembu is also well known for his mission to take tech jobs and innovation to rural parts of India, instead of focusing only on big cities.
Not Just Zoho
Zoho isn’t the only major Indian player hitting pause on chipmaking. Recently, the Adani Group also put its $10 billion semiconductor project on hold after conducting an internal review. They were in talks with Israeli company Tower Semiconductor, but those discussions have now been paused.
