A semiconductor startup announcement from a small Tamil Nadu town may have seemed unlikely a few years ago, but that's exactly what's happening in Tenkasi. Once known for farming and seasonal tourism, the town is now transforming into a chip-designing hub.
Ananthan Ayyasamy, a former semiconductor engineering director at Intel in the US, revealed plans to launch "Tenkasi Semiconductors" from the district.
Starting such an initiative in a small town like Tenkasi is unusual and significant because semiconductor chip design is a highly specialised and advanced field that usually happens in global tech hubs. Now, Tenkasi is attracting professionals who earlier worked abroad or in major cities.
The semiconductor industry focuses on two things: chip fabrication and chip design. Chip fabrication means manufacturing the semiconductor chips in large factories. Because it requires massive capital and heavy infrastructure, only a few companies can afford to run such plants.
So, Tenkasi is focusing on chip design, which does not involve manufacturing them. Instead, it involves creating the chip's digital blueprint or design, which can be later sent to the actual manufacturing, such as at Tata Electronics in Gujarat or abroad.
Instead of trying to immediately build a costly fabrication plant, the focus is on developing high-level technical skills, creating valuable intellectual property and building engineering expertise.
Ayyasamy is not the only one trying to build technology from Tenkasi, as much of this shift has been influenced by Sridhar Vembu, the founder of Zoho. For more than a decade, Vembu has been working to create a strong technology environment in Tenkasi instead. He believes that world-class tech companies can be built from villages and small towns.
The foundation for Tenkasi's transformation began in 2011 when Zoho opened a very small office in Mathalamparai village with just six employees. At the time, many doubted the idea, believing that rural areas would not have enough skilled talent to support a global software company.
Most assumed that technology companies needed to operate only from big cities such as Chennai or Bengaluru. But Zoho followed a different approach.
Instead of hiring only from metros, the company focused on identifying talented students from villages and small towns. Today, Zoho employs around 1,200 people in the Tenkasi region.
