Zoho Corporation has officially paused its ambitious $700 million plan to build a compound semiconductor fabrication unit in India. The Tamil Nadu-based SaaS giant had applied for incentives under the India Semiconductor Mission (ISM) in June 2023 and even established a new entity—Silectric Semiconductor Manufacturing—for the project.
However, Zoho Founder Sridhar Vembu announced on X (formerly Twitter) that the company’s board has decided to shelve the idea for now. “Since semiconductor fabs are highly capital-intensive and require government support, we wanted to be absolutely confident in the technology before using taxpayer money. We didn’t have that confidence, so we’re putting the plan on hold until we find a better approach,” Vembu said.
Prior to this, Vembu had also revealed plans for a semiconductor design center in Tenkasi, Tamil Nadu.
The Indian government’s ₹76,000 crore ISM initiative has approved five projects so far—four for chip packaging and one for chip fabrication. The only chip fab approved under ISM is Tata Electronics’ Dholera unit, which received approval in February 2024. Valued at over ₹91,000 crore, it is expected to be operational by 2027 and will employ around 2,000 people.
Zoho’s decision underscores the challenges in India’s semiconductor ambitions, especially around access to proven technology and high upfront costs.
