As the Biden administration prepares to impose further limits on China’s access to leading-edge chip technology, news has broken over the weekend that Chinese hackers have been siphoning off some of Europe’s ground-breaking chip technology for years.
The infamous Chinese hacker group Chimera, had access to the network of Dutch semiconductor giant NXP, for over two years, from late 2017 to the beginning of 2020. The hackers, believed to be backed by the Chinese Communist Party (CCP), are understood to have consistently stolen intellectual property, including, crucially, the company’s cutting-edge chip designs. According to sources close to the situation, the full extent of the threat has still to be disclosed.
The US has so far adopted a twofold strategy aimed at constraining China’s high-tech progress, much of it built on technology stolen from the West. This comprises stemming China’s access to leading-edge chip technology, while directly funding US semiconductor production. The Biden administration has outlined plans for a $3 billion National Advanced Packaging Manufacturing Program, targeting what the US now believes is a key aspect of semiconductor chip technology.
“Packaging is the new pillar of innovation in the semiconductor industry—it will change the industry drastically,” according to Jim McGregor, founder of technology analyst firm Tirias Research.
Cyber-espionage fuels China’s technology
But news of the years-long security breach at Dutch chipmaker NXP underlines the growing role that cyber-espionage now plays in China’s technology strategy, particularly where semiconductor technology is concerned. Identifiable hacker groups such as Chimera are only the tip of a huge iceberg of cyber-spying on the part of the CCP, which is known to have at least two full-time military regiments of hackers largely committed to spying on Western powers such as the US, the UK, Australia, and the European Union.
The Dutch hack is a prime example of the way in which spyware can sit undetected on any organization’s corporate network. The breach appears to have gone unnoticed by the Netherlands chipmaker until a similar attack was detected on KLM subsidiary, Dutch airline Transvia, after hackers breached Transvia’s reservation systems in September 2019. NXP became a major global competitor in the semiconductor market after it acquired US company Freescale in 2015 and has developed secure Mifare chips for financial applications such as Apple Pay. NXP is understood to have tightened its network security in the wake of the Chinese hack, beefing up its monitoring systems and imposing stricter controls on data accessibility and transfer of information within the company.
