India's Semiconductor Ambitions Face Challenges

In a significant blow to India's aspirations of building a domestic semiconductor manufacturing ecosystem, both Zoho Corp and the Adani Group have reportedly put their ambitious projects on hold. This development raises questions about the feasibility of India's plans to become a key player in the global semiconductor industry.

Zoho's Strategic Retreat

Sridhar Vembu, founder of Zoho Corp, confirmed the shelving of their semiconductor project, citing concerns over the technology path and the capital-intensive nature of the business. The proposed Rs 3,426 crore fabrication unit in Mysuru, which promised to create around 460 jobs, is now on hold until a more viable technological approach is identified.

Adani's Hesitation

Similarly, the Adani Group's discussions with Israel’s Tower Semiconductor for a $10 billion fab in Maharashtra have stalled. Sources indicate concerns over weak domestic demand for chips and limited financial commitment from Tower Semiconductor as key reasons for the pause.

Government's Response

Karnataka’s IT and BT minister Priyank Kharge expressed the government's commitment to partnering with private players, despite not having received official communication from Zoho about the project's shelving. This situation underscores the challenges facing India's electronics system design and manufacturing (ESDM) sector.

Looking Ahead

With ongoing projects like Tata Group’s $11 billion fab and Micron’s $2.7 billion chip packaging facility, India's semiconductor dreams are not entirely dashed. However, the pauses by Zoho and Adani highlight the significant hurdles that remain.