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Key Points

Zoho's ambitious semiconductor chip manufacturing project has been put on indefinite hold by CEO Sridhar Vembu. The decision stems from technological uncertainties and the need for substantial government support in this capital-intensive sector. Vembu, who recently transitioned to chief scientist, explained the board's cautious approach to investing taxpayer funds. The company remains committed to exploring future technological opportunities in the semiconductor space.

Key Points: Zoho CEO Sridhar Vembu Halts $700M Chip Manufacturing Plan

  • Zoho suspends $700 million semiconductor chip manufacturing project
  • Company requires strong government backing for capital-intensive venture
  • Vembu steps back from technology investment uncertainty
  • New Silectric Semiconductor Manufacturing entity remains on hold
2 min read

Zoho CEO Sridhar Vembu has no 'confidence in tech', shelves $700 million chip plan

Zoho's semiconductor investment shelved due to technology uncertainties and need for government support, reveals Sridhar Vembu

"We did not have that confidence in the tech, so our board decided to shelve this idea - Sridhar Vembu"

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.

- IANS

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Reader Comments

R
Rajesh K.
Very responsible decision by Mr. Vembu. Semiconductor manufacturing is not child's play - needs proper tech readiness. Better to wait than waste public money. Hope other startups learn from this maturity. 🇮🇳
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Priya M.
Disappointing but understandable. India needs semiconductor independence but jumping without proper tech is risky. Maybe collaboration with established players would help? Zoho should reconsider after proper tie-ups.
A
Arvind S.
This shows why Indian tech CEOs are different! Western companies would have taken the money first and failed later. Vembu's integrity is commendable 👏 Hope the government provides more R&D support for semiconductor tech.
S
Sneha R.
As someone from Tenkasi, we were really excited about this project bringing jobs to our area. Hope they revive it soon with better tech. The youth here need such opportunities!
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Vikram J.
While the caution is good, India can't afford to wait forever in semiconductor race with China. Government should create special tech transfer programs with countries like Japan/Taiwan. Time is running out!
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Neeta P.
Interesting that he stepped down as CEO to become chief scientist before this decision. Maybe he saw technical challenges coming? Zoho should focus on what they do best - software. Hardware is different ball game altogether.

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