We did not have ..., says Zoho founder Sridhar Vembu as company suspends $700 million chipmaking plan

Zoho has put a stop to its year-long effort to invest $700 million in chip manufacturing, the company's co-founder and chief scientist Sridhar Vembu has said. While a report by news agency Reuters reported that the software company Zoho struggled to find the right technology partner who could provide guidance on the complex processes involved in making chips, Vembu said that they did not have “confidence in the tech” so they shelved the idea.
“On our semiconductor fab investment plan, since this business is so capital intensive it requires government backing, we wanted to be absolutely sure of the technology path before we take taxpayer money,” Vembu said in a post on X
“We did not have that confidence in the tech so our board decided to shelve this idea for the time being, until we find a better tech approach,” he added.


As part of its diversification strategy, Zoho had intended to invest $400 million in a semiconductor manufacturing facility located in Karnataka. This project was expected to create 460 jobs and would have been the first of its kind in the state.
Zoho's subsidiary, Silectric Semiconductor Manufacturing, had made a small number of hires and formed a board last year to oversee its chipmaking efforts.
Zoho, a company valued at around $12 billion, is known for offering more affordable alternatives to cloud-based software from companies like Microsoft. Vembu is also recognised for his unique approach of locating business operations in rural Indian villages.
Zoho provides software and related subscription services to businesses in 150 countries. The company has over 18,000 employees and more than 120 million users worldwide.
This news follows a report from Reuters stating that Gautam Adani’s group has also paused discussions with Israeli firm Tower Semiconductor regarding its $10 billion chip project after conducting an internal review.