Protecting Semiconductor Technologies: The Risks of Chinese Economic Espionage

The world's most important industry needs better protection from state-sponsored threats.

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Protecting Semiconductor Technologies: The Risks of Chinese Economic Espionage

In this third installment of my strategic industries series, I’m focusing on Chinese state-sponsored industrial espionage in the semiconductor sector.

As the industry has evolved, a few key countries, namely the U.S., the Netherlands, Taiwan, South Korea, and Japan, have come to play vital roles in the supply chain. However, each country’s unique technological capabilities have made them prime targets for economic espionage, particularly from China, which is actively pursuing self-sufficiency in chip manufacturing.

Despite pouring billions into domestic semiconductor development, China still lags behind industry leaders in cutting-edge chip production. To close this gap, Beijing has employed a range of tactics, and Chinese state-backed efforts have repeatedly targeted leading firms such as TSMC, Samsung, and ASML, attempting to bypass decades of research and development through illicit means.

This post examines the semiconductor industry’s current landscape, the PRC’s push for technological independence, and the growing threats posed by economic espionage. It also highlights key case studies and offers recommendations for companies and governments to protect critical semiconductor technologies from state-backed risks.

The post is structured as follows:

1. Current Trends in the Semiconductor Industry: Focusing on Taiwan, South Korea, and Japan

2. The Rise of Chinese Semiconductors

3. Economic Espionage Threats to Semiconductor Tech

4. Case Studies

5. Why This Matters

6. What Companies and Governments Should Do

Let’s take a look.