K’taka Approves Zoho-Backed Silectric’s INR 3,426 Cr Semiconductor Plant

The Karnataka government has reportedly approved Zoho-backed Silectric’s proposal to set up a semiconductor manufacturing unit in the state at the cost of INR 3,425.6 Cr. 

As per Economic Times, chief minister (CM) Siddaramaiah said that the state’s first semiconductor project would come up at the Kochanahalli electronics manufacturing cluster (EMC) near Mysuru. The new plant is expected to create 460 jobs. 

The nod was accorded during a meeting of the state high-level clearance committee (SHLCC), chaired by the CM. 

Silectric plans to build a silicon carbide-based fabrication as well as assembly, testing, marking and packaging (ATMP) unit. The company, backed by directors of the SaaS giant, has sought 40 acres of land at the EMC cluster. 

As per a proposal submitted by the company to the government, Silectric plans to build an end-to-end silicon carbide manufacturing value chain at the new unit and make products such as ingots, wafers, metal-oxide-semiconductor field-effect transistors (MOSFETs), modules, among others. 

While Silectric’s initial focus will reportedly be on manufacturing ingots, it plans to steadily move up the ladder to the packaging stage and roll out MOSFETs too at the new unit. 

The proposal reportedly also underlined that Silectric is being led by a team of “experienced” semiconductor professionals, with the financial backing of Zoho and support from the electronics and IT ministry (MeitY).

The development comes three months after reports surfaced in September that the Chennai-based SaaS giant was looking to set up a semiconductor unit in Odisha with an investment of INR 3,034 Cr. However, hours later, founder and CEO Sridhar Vembu rubbished the report and called it “inaccurate”.

At the time, Vembu said that the investment proposal was still pending with various authorities and a decision had not been made on the matter. 

Karnataka has been actively wooing companies with incentives and sops to set up their base in the state. It has earmarked 234 acres of land near Mysuru for an electronics manufacturing cluster. Besides, local authorities are also said to be working on a new electronics system design and manufacturing (ESDM) policy to further boost the sector.

It is pertinent to note that Zoho has been planning its entry in the space for some time amid the ongoing generative artificial intelligence (GenAI) boom fuelled by semiconductor chips. In May 2024, reports hinted that Zoho was mulling a $700 Mn investment to set up a chip manufacturing plant, which would focus on compound semiconductors. 

Around the same time, the company reportedly applied for approval under the government’s production linked incentive (PLI) scheme. 

As per an Inc42 report, the homegrown semiconductor market is projected to surpass the $150 Bn by 2030, buoyed by growing demand and a regulatory push. 

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.