Zoho has officially paused its semiconductor chip manufacturing plans, nearly a year after announcing a $700 million investment in the sector. The company faced difficulty finding a suitable technology partner and has now decided to shelve the initiative.
CEO Cites Uncertainty in Tech
Zoho founder and CEO Sridhar Vembu stated that the company lacked confidence in the technology and was not ready to proceed. He emphasized that semiconductor manufacturing is highly capital-intensive and needs strong government support. Vembu said the board decided not to pursue the plan until they are more certain about their technology capabilities.
Ethical Stand on Public Funding
Vembu added that Zoho wanted to be sure of its tech path before accepting any taxpayer money. The company preferred not to move forward without full clarity on technical feasibility.
Initial Setup and Investments
Zoho entered the chipmaking space in April 2024, forming a separate division, hiring initial staff, and establishing a board under its subsidiary, Silectric Semiconductor Manufacturing. The company had proposed a $400 million facility in Karnataka, which was expected to generate employment in the Mysuru region.
Broader Business Context
Zoho, currently valued at $12 billion, is known for offering cost-effective cloud-based software solutions to businesses across 150 countries. With over 18,000 employees and 120 million users worldwide, the company remains one of India’s leading tech startups.
Industry Trend
Zoho’s decision mirrors a broader trend, as the Adani Group has also paused a $10 billion chipmaking discussion with Israeli firm Tower Semiconductor following an internal review.
