Following Adani, Zoho Shelves $700 Mn Semiconductor Project Amid Challenges 

A year after announcing its ambitious plan into semiconductor manufacturing, Zoho has officially suspended its $700 million chipmaking plans. As per news reports, Founder and CEO Sridhar Vembu said the company lacked confidence in its current technology roadmap and could not justify seeking government support or taxpayer money without clarity. 

Zoho Faces Roadblocks in Semiconductor Partner Search 

Zoho’s decision was driven by its inability to secure a suitable technology partner for the highly specialised fabrication process. Despite extensive outreach efforts, the SaaS giant could not find a collaborator to help execute the complex project, which involves compound semiconductor manufacturing. 

PLI Scheme Incentives and Karnataka Fab Investment Also on Hold 

Zoho had earlier applied for incentives under India’s Production Linked Incentive (PLI) scheme for semiconductors. It had also committed $400 million to set up a fabrication unit in Karnataka, under its associate firm Silectric.  

In December, the Karnataka government approved Silectric’s proposal to set up a semiconductor plant with an investment of ₹3,425.6 crore. The project was set to be Karnataka’s first semiconductor plant near Mysuru, promising 460 jobs. This too is now in limbo. 

Adani Group Also Pauses $10 Billion Semiconductor Project 

Zoho’s move follows a similar development from the Adani Group, which paused its $10 billion semiconductor venture with Israel’s Tower Semiconductor. Citing an internal assessment, Adani concluded that the project lacked strategic and commercial feasibility at this time. In September 2024, the Maharashtra cabinet approved this project of ₹83,947 crore, which was expected to create 5,000 jobs. 

Also Read: Adani Enterprises Shares in Focus: Revenue and PAT Surged in Q4FY25. 

India Semiconductor Mission Prepares for Second Phase 

As Zoho and Adani retreat from active chipmaking plans, India’s broader semiconductor strategy continues to evolve. The India Semiconductor Mission (ISM) has appointed Amitesh Kumar Sinha as its new CEO. The government is also preparing the next phase of ISM, which is expected to provide more support for chip design, fabrication, and essential elements like specialty gases and packaging infrastructure. 

Conclusion 

Zoho’s decision highlights the difficulties private companies face in India’s semiconductor sector, from technical expertise to global partnerships. While major projects face delays, the government’s semiconductor mission continues to drive efforts for a self-reliant chip ecosystem. 

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