Another setback to the Indian government's ambitious semiconductor goals came when the Indian software company Zoho halted its year-long pursuit of a $700 million plan to enter the chip manufacturing industry.

Finding the ideal technology partner to provide guidance on the intricate chipmaking processes proved to be a challenge for Zoho.

With a $12 billion valuation, Zoho provides less expensive substitutes for cloud-based software products from companies like Microsoft. Sridhar Vembu, its co-founder, is well-known for his well-liked and unorthodox strategy of setting up shop in a rural village.

Zoho intended to spend $400 million on a semiconductor plant in the southern Indian state of Karnataka as part of its diversification efforts.

Prime Minister Narendra Modi, who has spent years attempting to entice businesses in his quest to establish India as a global center for semiconductor manufacturing, may suffer a setback from Zoho's withdrawal.

Founded in 1996, Zoho has more than 18,000 employees and more than 120 million users.

It provides software and related services to companies in 150 countries on a subscription basis.

 

According to reports, Zoho's Silectric Semiconductor Manufacturing organized a board to supervise chipmaking efforts and made a few recruits last year, which caused the failure.

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In December, the Karnataka government of India announced that it had granted historic clearance to Zoho's $400 million facility in the Mysuru region, which would have created 460 jobs and been the state's first project of its kind.