Chinese hackers have pillaged Taiwan’s semiconductor industry

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Taiwan has faced existential conflict with China for its entire existence and has been targeted by China’s state-sponsored hackers for years. But an investigation by one Taiwanese security firm has revealed just how deeply a single group of Chinese hackers was able to penetrate an industry at the core of the Taiwanese economy, pillaging practically its entire semiconductor industry.

At the Black Hat security conference today, researchers from the Taiwanese cybersecurity firm CyCraft plan to present new details of a hacking campaign that compromised at least seven Taiwanese chip firms over the past two years. The series of deep intrusions—called Operation Skeleton Key due to the attackers’ use of a “skeleton key injector” technique—appeared aimed at stealing as much intellectual property as possible, including source code, software development kits, and chip designs. And while CyCraft has previously given this group of hackers the name Chimera, the company’s new findings include evidence that ties them to mainland China and loosely links them to the notorious Chinese state-sponsored hacker group Winnti, also sometimes known as Barium, or Axiom.

“This is very much a state-based attack trying to manipulate Taiwan’s standing and power,” says Chad Duffy, one of the CyCraft researchers who worked on the company’s long-running investigation. The sort of wholesale theft of intellectual property CyCraft observed “fundamentally damages a corporation’s entire ability to do business,” adds Chung-Kuan Chen, another CyCraft researcher who will present the company’s research at Black Hat today. “It’s a strategic attack on the entire industry.”