Zoho, a software company, has halted its ambitious $700 million semiconductor chip manufacturing project, citing a lack of confidence in the current technological path. 

Vembu explained that because chip fabrication is a capital-intensive industry, it requires significant government support.

"On our semiconductor fab investment plan, since this business is so capital intensive, it requires government backing, we wanted to be absolutely sure of the technology path before we take taxpayer money," Vembu wrote on X, a social networking site.

He added that they did not have confidence in the technology, so the board decided to put this idea on hold for the time being, "until we find a better tech approach".

"We wanted to be absolutely certain of the technology path before accepting taxpayer money. We did not have that confidence in the technology, so our board decided to put this idea on hold for the time being," Vembu explained.

In June of last year, the Tamil Nadu-based software firm applied for incentives under the central government's Rs76,000/crore India Semiconductor Mission (ISM).

It also established a new entity called Silectric Semiconductor Manufacturing to oversee the fabrication unit initiative.

Before applying for ISM, Zoho announced plans to establish a semiconductor design project in Tenkasi, Tamil Nadu, the company's headquarters.

In January of this year, Vembu resigned as CEO to become the company's chief scientist.

Zoho provides subscription-based software and related services to businesses across multiple countries.

Vembu founded AdventNet, a software development house for network equipment providers, in 1996. It was renamed Zoho Corporation in 2009, and it focuses on providing SaaS support for customer relationship management services.