Indian software firm Zoho has put a hold on its ambitious $700 million plan to enter the semiconductor manufacturing sector, delivering another blow to India’s aspirations of becoming a global chipmaking hub. The decision comes amid the company’s struggles to find a suitable technology partner for its proposed semiconductor facility.
Sources familiar with the matter told Reuters that Zoho, valued at around $12 billion, suspended its plans after a year-long search failed to secure the technical collaboration required for such a complex venture. The company had planned to invest $400 million in setting up a semiconductor plant in Karnataka’s Mysuru region, which was expected to generate 460 jobs.
The development follows reports that Gautam Adani’s group has also paused discussions with Israel’s Tower Semiconductor for a separate $10 billion chip project.
Founded in 1996, Zoho provides cloud-based software services and has over 120 million users across 150 countries. Its co-founder Sridhar Vembu had publicly backed the semiconductor initiative, describing it as vital for India’s technological growth. The company even created a new entity, Silectric Semiconductor Manufacturing, and assembled a board for the effort.
Despite these steps, the plan is now suspended indefinitely, though sources say Zoho may revisit it if a suitable partner emerges. The Karnataka government, which approved the project in December 2024, has yet to comment.
The setback highlights ongoing challenges faced by India’s semiconductor mission, which continues to lack a single operational chip fabrication unit.