APT10’s cyber-espionage campaign, which ramped up after the imposition of tariffs, was part of China’s broader strategy to acquire sensitive technologies through illegal means. The cyberattacks focused on companies that were involved in the production of critical semiconductor equipment, which had become restricted by U.S. tariffs.
A large Chinese technology company was also directly impacted by U.S. tariffs and sanctions. The United States imposed sanctions, severely restricting the company’s ability to procure advanced semiconductor technologies from U.S. companies. Chinese state-sponsored hackers then targeted U.S. and European companies involved in semiconductor production, again aiming to steal IP that could help the Chinese company acquire the technology they could no longer purchase.
Escalating Sanctions and Cyberattacks
In October 2022, the U.S. government expanded its restrictions on the export of advanced semiconductor technology to China, imposing tariffs and export controls on multiple companies. These sanctions were supposed to limit China’s access to cutting-edge semiconductor technologies and equipment, in attempts to slow down China’s development of artificial intelligence (AI), quantum computing, and other technologies that had possible military applications.
In response, Chinese state-sponsored hacking groups, such as APT41, stepped up their cyberattacks on U.S. semiconductor companies. APT41 is known for its cyber-espionage activities, particularly in response to geopolitical tensions.
Following the 2022 tariffs, APT41 launched a series of cyberattacks on U.S. semiconductor firms, trying to steal IP related to chip designs and production techniques. These cyberattacks also were part of China’s broader strategy to overcome the U.S. export restrictions by acquiring sensitive technology.
Legal Issues and Supply-Chain Vulnerabilities
Another major risk to the semiconductor industry is its dependence on global supply chains, particularly those engaging companies in Taiwan, which is home to some of the most advanced semiconductor manufacturers. Rising tensions between the U.S. and China over Taiwan have made the semiconductor companies located there key targets for cyberattacks.
In 2023, a Taiwanese company was hit by a ransomware attack that interrupted its operations. This incident occurred amid increasing geopolitical tensions over Taiwan, with Chinese hackers trying to access the company’s cutting-edge manufacturing techniques.
The COVID-19 pandemic also highlighted the fragility of dependencies across global supply chains. Factory shutdowns and shipment delays during the pandemic underscored the risk that geopolitical tensions or natural disasters could disrupt semiconductor production, impacting industries worldwide.
Technological Nationalism
In response to these challenges, many countries are working to build their domestic semiconductor industries. This drive for self-sufficiency has intensified global competition for resources, talent, and IP.
China, for example, has made technological independence a priority. Through initiatives like “Made in China 2025,” China is investing heavily in domestic chip production and innovation, aiming to reduce its reliance on foreign technology, particularly from the United States. This effort is crucial for maintaining its economic and technological competitiveness.
