Zoho Corporation has officially shelved its ambitious $700 million semiconductor manufacturing plans, citing a lack of confidence in its technological readiness and the absence of a reliable technology partner. The decision marks a significant pause in what could have been a pioneering move by a major Indian software company into the capital-heavy chip-making sector.
Founder and CEO Sridhar Vembu announced the development on social media, stating that while the company had secured preliminary government approvals and even created a dedicated division for the semiconductor venture, it ultimately decided against moving forward. “We did not have confidence in the technology,” Vembu wrote, adding that the board could not justify seeking government subsidies without certainty in their tech capabilities.
Semiconductor manufacturing requires deep technological expertise, massive capital, and robust government support. While India has set aside billions to develop a domestic semiconductor ecosystem—offering incentives of up to 70% of project costs—Zoho’s decision highlights the industry’s high entry barriers and the critical importance of global technology partnerships.
India’s broader semiconductor mission continues, with major players like Tata, Vedanta, and HCL actively pursuing chip fabrication projects. However, Zoho’s withdrawal, along with Adani’s stalled JV with Tower Semiconductor, raises concerns about execution challenges and the complexity of aligning domestic capabilities with global technology standards.
As India pushes to become a semiconductor powerhouse, success will depend on sustained investment, strategic joint ventures, and accelerated technology transfers.