BENGALURU: Homegrown SaaS unicorn Zoho has shelved its plan to build a $700 million compound semiconductor fabrication plant.
Regarding the semiconductor fab investment plan, Sridhar Vembu, chief scientist at Zoho, said, "Since this business is so capital intensive, it requires government backing. We wanted to be absolutely sure of the technology path before we took taxpayer money. We did not have that confidence in the technology, so our board decided to shelve the idea for the time being, until we find a better technological approach."
In March last year, the company's founder, Sridhar Vembu, announced on X his plans for a semiconductor design project in Tenkasi, Tamil Nadu.
The company’s proposal had included manufacturing compound semiconductors that have specialized commercial applications.
In May last year, The New Indian Express reported that Zoho had been seeking incentives from the government and that the proposal was being reviewed by a panel. The IT ministry had asked the firm to provide more clarity on the plan.
Later in September, in an interaction with The New Indian Express, Vembu said that the company was not directly involved in the semiconductor venture and was only an investor in Silectric Semiconductor Manufacturing, which was awaiting government clearance.
"Zoho has no expertise in this area (semiconductors). We know software, technology... We don't know about semiconductors. That's why we are only an investor, and the application is still pending," he had said.
Vembu added that once Silectric received clearance, it would build semiconductors for power electronics. Two of Vembu’s classmates and a few others had been onboarded for the venture.
Additionally, according to reports, Gautam Adani's group has paused discussions with Israel's Tower Semiconductor for a $10 billion chip project. Reports claimed that the project did not make strategic or commercial sense for the group.