Zoho, Adani Pause Chip Projects, Hurting India’s Ambitions

Zoho Corporation has suspended its $700 million semiconductor manufacturing initiative, including a planned $400 million facility in Karnataka, after failing to secure a technology partner and expressing doubts about the current technology. Founder Sridhar Vembu cited the capital-intensive nature of chip fabrication and the need to avoid risking taxpayer money, with the board deciding to shelve the project for now. The Karnataka government, which had approved the project and anticipated job creation, has not yet received official notification of the suspension. Separately, the Adani Group has paused its $10 billion chip project with Israel's Tower Semiconductor after an internal evaluation. These setbacks from Zoho and Adani are considered major obstacles to India's goal of building a domestic semiconductor ecosystem and establishing itself as a global chip manufacturing hub. The developments underscore the significant challenges Indian firms face in entering the complex and capital-heavy chip industry.