Sridhar Vembu Pulls Plug on Zoho's Chipmaking Dream Amid Tech Uncertainty
In a blow to India's dreams of making semiconductors, Zoho Corporation has chosen to halt its $700 million chip fabrication facility. Its Co-founder and CEO Sridhar Vembu announced the move on social media site X, attributing the firm's insufficient faith in the current technology direction as the major cause for dropping the plan.
Given this business is as capital-hungry it does need governmental support, we wanted to make absolutely certain on the technology trajectory before we expend taxpayer funds," Vembu wrote. "We did not feel that certainty about the tech so our board opted to table this concept at least for the time being until we discover an improved tech plan.
Zoho's move comes after more than a year of considering the option of having a semiconductor fabrication plant. The firm is said to have faced a challenge in getting an appropriate technology partner to fund the technologically challenging initiative, as quoted by a source close to the situation in Reuters.
The decision comes amid increasing doubts over the feasibility of large-scale semiconductor production in India. It comes after reports that the Adani Group has also suspended its $10 billion chip venture with Israel's Tower Semiconductor following an internal review.
The Indian government has been trying to build a domestic semiconductor ecosystem with policy incentives and public-private partnerships. Yet, the capital-intensive nature and technical complexities of chip manufacturing have been major stumbling blocks.
Zoho, established in 1996 in Tamil Nadu, is famous for providing a wide variety of business software solutions to customers in more than 150 nations. Despite competing on the world stage against the likes of Microsoft and Salesforce, the firm remains bootstrapped and profitable.
The sidelining of the chip project showcases the difficulties even mature tech players experience in entering the semiconductor domain.
