BENGALURU: Adani Group and Zoho Corp are both said to be backing off from their ambitious semiconductor projects, a setback to India’s plans to develop an indigenous chip manufacturing ecosystem.
While Zoho founder Sridhar Vembu confirmed the move, the Adani news was reported by Reuters based on sources. Adani Group was in discussions with Israel’s Tower Semiconductor for a proposed $10 billion fab in Maharashtra. Zoho-backed semiconductor venture Silectric had proposed a Rs 3,426 crore fabrication unit in Mysuru in Karnataka, for which the state govt had granted approval four months ago.
On Thursday, Vembu posted the following on social media platform X: “On our semiconductor fab investment plan, since this business is so capital-intensive it requires govt 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.”
The Karnataka facility was expected to create approximately 460 jobs in the Mysuru region. State chief minister Siddaramaiah had described the investment as a milestone for the state’s electronics manufacturing ambitions. A person familiar with Zoho’s planning said the decision followed the inability to secure a suitable overseas technology partner. “They were exploring a very complex segment – power electronics semiconductors used in cars – not the more common digital processors found in phones.That space has very few established manufacturers globally,” the person told TOI.
Karnataka’s IT and BT minister Priyank Kharge said the govt had not yet received official communication from Zoho about shelving the project. “The Karnataka govt is committed to partnering with private players and is confident of our ESDM (electronics system design & manufacturing) and industry policies,” he told TOI. Officials familiar with the matter admitted that the decision marks a loss for Karnataka’s semiconductor roadmap.
On the Adani project, Reuters quoted sources as saying Adani was concerned about weak domestic demand for chips and the limited financial commitment from Israel’s Tower, which was expected to provide technological expertise.
In 2023, the Vedanta-Foxconn joint venture to build a semiconductor plant collapsed.
India currently does not have an operational chipmaking facility. Ongoing projects include Tata Group’s $11 billion fab and packaging units and Micron’s $2.7 billion chip packaging facility in Gujarat.
