New Delhi, May 1 Software major Zoho has put its ambitious $700 million semiconductor chip manufacturing project on hold, and the company’s Co-founder Sridhar Vembu on Thursday said they were not confident enough in the current technology path to proceed.
Vembu explained that since chip fabrication is a highly capital-intensive business, it needs strong government support.
“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 wrote on X social media platform.
He added that they did not have that confidence in the tech so the board decided to shelve this idea for the time being, “until we find a better tech approach”.
“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,” Vembu mentioned, explaining the company’s decision to suspend the plan.
The Tamil Nadu-based software firm had, in June last year, applied for incentives under the central government’s Rs 76,000 crore India Semiconductor Mission (ISM).
It had also set up a new entity called Silectric Semiconductor Manufacturing to lead the fabrication unit initiative.
Before applying under ISM, Zoho had also announced plans to establish a semiconductor design project in Tenkasi, Tamil Nadu, where the company is headquartered.
In January this year, Vembu stepped down as the CEO to serve as the company’s chief scientist.
Zoho offers software and related services on subscription to businesses in several countries.
In 1996, Vembu founded a software development house for network equipment providers called AdventNet, which was renamed Zoho Corporation in 2009, focusing on providing SaaS support to customer relationship management services.
Vembu moved to Tenkasi in Tamil Nadu in 2019.
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