Zoho shelves $700-mn semiconductor chip plant plan: Sridhar Vembu

Tamil Nadu-based software-as-as-service (SaaS) major Zoho Corporation has shelved its plan to build a $700-million compound semiconductor fabrication plant, the company’s founder Sridhar Vembu said.

 

“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. 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,” Vembu said on X.

 

In June last year, the company had applied for government incentives under the India Semiconductor Mission (ISM) to build a compound semiconductor chip fabrication unit. The SaaS firm also formed a new company, Silectric Semiconductor Manufacturing, for this purpose.

 

Before applying for incentives to build a chip-fabrication unit under ISM, Vembu had also announced Zoho’s plans to set up a semiconductor design project at Tenkasi in Tamil Nadu.

 

The ₹76,000 crore ISM incentive plan, which aimed to kickstart semiconductor chip manufacturing and packaging in the country, has tasted success, and so far seen five applications being approved. Four of these ISM approved projects are chip packaging units, while Tata Electronics is the sole chip fabrication unit so far.

 

The Tata Group’s Dholera semiconductor unit is the first and only chip fabrication facility in India which was approved by the Centre on February 29, 2024 under the ambitious ISM. The plant is expected to start operations by 2027 and may employ close to 2,000 people overall. The chip fabrication unit in Dholera is coming up at a cost of more than ₹91,000 crore.