Indian software firm Zoho has suspended its year-long pursuit of a $700 million plan to foray into chip manufacturing, sources familiar with the matter said, dealing another blow to the Indian government’s ambitious semiconductor plans.

Zoho struggled to find the right technology partner required to advise on the complex chipmaking processes, one of the sources said.

Reuters reported on Wednesday that Indian billionaire Gautam Adani’s group has also paused discussions with Israel’s Tower Semiconductor for its $10 billion chip project following an internal evaluation by the Indian group.

Zoho, valued at around $12 billion, offers cheaper alternatives to cloud-based software tools made by the likes of Microsoft. Its billionaire co-founder Sridhar Vembu is known for his popular and unconventional approach of locating business operations in rural villages.

In a bid to diversify, Zoho planned to invest $400 million in a semiconductor facility in Karnataka state in south India.

Vembu has said that the technology was vital for the nation.

“Zoho could not find a tech partner despite an extensive search,” said one of the sources.

The entire chipmaking plan, first reported by Reuters in May 2024, has for now been suspended, said the two sources, who declined to be named as the decision is not public.

It was not clear if Zoho will decide to revive its plans if a partner can be found. A Zoho spokesperson declined to comment.

Representatives for Karnataka state did not immediately respond to a request for comment.

Zoho’s retreat will be a setback to Prime Minister Narendra Modi who has for several years tried to lure companies in his pursuit to make India a global chip manufacturing hub.

India does not have a single operational chipmaking facility.

Zoho, established in 1996, offers software and related services on subscription to businesses in 150 countries and has over 18,000 employees and more than 120 million users.

Zoho’s Silectric Semiconductor Manufacturing last year made a handful of hires and a formed a board to oversee chipmaking efforts, the source who gave the reason for the failed plan said.

India’s Karnataka government said in December it had given a landmark approval to Zoho’s planned $400 million facility in Mysuru region, which would have generated 460 jobs and been the first such project in the state.

Image used for representative purpose. File
| Photo Credit: Reuters

Adani Enterprises Ltd, the flagship company of the billionaire Gautam Adani’s group, on Thu₹day reported a 7.5x jump in its fourth quarter net profit on the back of one-time gain from stake sale in consumer goods venture, and strong growth in solar manufacturing and airports.

Net profit of ₹3,845 crore in January-March – the fourth quarter of April 2024 to March 2025 fiscal year – compared with ₹ 450.58 crore earnings in the same period a year back, according to a company statement.

The profit rise was helped by a ₹3,286 crore gain made from the sale of stake in Wilmar.

After adjusting for one-time gain from the Wilmar stake sale, the net profit came at ₹1,313 crore.

The strong performance was driven by the company’s incubator businesses – solar and wind manufacturing and airports, which are expected to be the next large value creators for the group.

EBITDA for these two businesses increased 73% and 44%, respectively, during the quarter, lifting the consolidated EBITDA by 19% to ₹4,346 crore for Q4.

This performance by the emerging infrastructure businesses offset the drop in trading business due to a fall in commodity, mainly coal prices and volumes, down 38% year-on-year.

The mining business witnessed a 30% year-on-year jump in dispatch for the quarter.

For full fiscal year 2024-25 (FY25), the net profit of ₹7,099 crore compared with ₹ 3,240.78 crore of the previous financial year.

“At Adani Enterprises, we are building businesses that will define the way forward for India’s infrastructure and energy sector,” said Gautam Adani, chairman of the Adani Group. “Our robust performance in FY25 is a direct outcome of our strengths in scale, speed and sustainability. Impressive growth across our incubating businesses reflects the power of disciplined execution, future-focused investments and a commitment to operational excellence, innovation and sustainability.” He said that as the company scales up its energy transition, airports, data centres and mining services, it is creating new market leade₹ that will drive India’s growth story for decades to come. “Each success across our incubation spectrum accelerates our mission to create long-term value and catalyses India’s emergence as a global economic powerhouse.” The company said it is expanding its solar manufacturing capacity by 150 per cent or 6 GW to 10 GW. It has already achieved financial closure of ₹ 5,500 crore for capacity expansion.

It has also increased the wind capacity to 2.5 GW from 1.5 GW. This will drive the earnings in the coming quarte₹, it added.

On the airports side, the passenger travelling across its seven airports increased by 7%. It added 12 new routes and eight new flights.

In addition to capacity expansions, other developments and an increase in consumer offerings at its airports, AEL will also be inaugurating the Navi Mumbai airports.

The data centre arm, AdaniConnex, completed construction of the Noida data centre and made it operational with an initial capacity of 10 MW.

In mining services, the Para coal block commenced operations and successfully made the fi₹t customer delivery.

However, AEL’s mainstay coal trading segment, which contributes nearly one-third of its overall revenue, saw a 47 per cent fall in coal trading segment profit to ₹833 crore due to a decline in coal prices and lower demand for imported coal. The segment’s revenue slid 45%.

Pre-tax earnings of EBITDA of ANIL Ecosystem were up 73% in Q4 and more than double in FY25. Airports business reported a 43% rise in EBITDA in the March quarter and 44%in FY25. Similarly, mining services EBITDA tripled in the fourth quarter and more than doubled in FY25.

Coal business, however, saw EBITDA fall to ₹924 crore in Q4 (from ₹ 1,647 crore a year back) and to ₹ 3,585 crore in FY25 (₹ 5,173 crore in FY24).

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.