The Growing Need for Robust Cybersecurity in the Semiconductor Industry

The semiconductor industry has become synonymous with a country’s national security and economic stability. As the backbone of any electronic device, access to semiconductors is a top priority for most governments and industries. As global reliance on technology grows, thanks to new advances in artificial intelligence (AI), machine learning (ML), 5G, and the Internet of Things (IoT), concerns around cybersecurity grow.  

Electronic components have become essential in powering critical infrastructure, such as military systems and medical devices. Because of this, protecting the confidentiality and availability of semiconductor technology is paramount.  

With the continued integration of electronic devices into everyday life, chip technology has advanced quickly. Over the last several decades, the way semiconductor chips are designed, manufactured, and utilized has undergone a massive transformation, only becoming more complex with the rise of globalization. These changes have benefited customers, but also unveiled new opportunities for cybercriminals to take advantage.

Unlike other industries, the semiconductor industry faces a different level of severity from successful cyberattacks due to its specific intellectual property and criticality to business and national security.

Rising Cyber Threats in a Digitized World

Digitalization is an integral part of the evolution of modern-day businesses. Advanced technology can help streamline processes, increase efficiency, optimize costs, and reduce waste. Unfortunately, with the proliferation of advanced technologies in different industries, the risk of cyber threats grows. Many cybercriminals are increasing their attacks against the industry, aided by accelerating digital transformations in the market.

The semiconductor industry is unique in terms of the threats it faces from criminals. Like most companies, profit-seeking ransomware attacks are one of the many digital assaults it deals with. However, semiconductor companies possess “unique, valuable, and restricted intellectual property that could make them particularly vulnerable.”

A successful breach can result in the loss of years of research and development, added costs, and competitors gaining an unfair advantage. Similarly, the successful theft of intellectual property (IP) can have a massive impact on national security as many of these components are used in aerospace and defense applications. Unauthorized access to sensitive chip designs could compromise critical infrastructure or weaken a nation’s defense capabilities.

In Deloitte’s study on the intensifying threat of online attacks by cyber criminals, the report states that due to “the increasing importance of semiconductors for multiple industries, it’s often targeted by state-backed actors as a result of geopolitically issues and restrictions on advanced chipmaking tech, the IP of semi companies is one of the world’s most important targets for cyber-attacks.”

Deloitte’s article goes on, “If geopolitical tensions continue to escalate in 2024–resulting in further restrictions around IP, chips, and raw materials–cyberattacks may intensify, disrupting production in the industry.”

Cybersecurity analysts note that the state of semiconductor cybersecurity today has accelerated the frequency of digital assaults throughout the industry. There have been growing occurrences of sophisticated cyber incidents, which is concerning given the high stakes of a successful breach.

This year, researchers discovered “a vulnerability that allows recovery of data from GPU local memory created by another process on Apple, Qualcomm, AMD, and Imaginations GPUs.”  

The researchers built a PoC where an attacker can listen to another user’s interactive large language model (LLM) sessions across process or container boundaries, revealing a new arena of cyberattack possibilities. Samsung Electronics, Intel, and Arm acknowledged over the past 12 months that weaknesses in their semiconductors, meaning that even the hardware itself can pose as an entry point for cyberattacks.  

Growing cyberattacks on semiconductor companies have made headlines over the last several years. These attacks range from ransomware targeting supply chains, like the attack on Applied Materials in 2023, which resulted in a $250 million loss in sales, to infiltrations compromising chip design and production. These incidents can cause significant financial damage, disrupt operations, and erode trust between manufacturers and their clients.

In fact, on August 21st, 2024, Microchip Technology announced that a cyberattack had disrupted its operations, but the full scope, nature, and impact of the incident are not yet known. These sophisticated efforts will likely increase as the importance of electronic components grows with the continued use of AI and LLMs.

Steps Semiconductor Giants and Governments Are Taking to Strengthen Cybersecurity

Establishing a proactive security system is an organization's first step in strengthening cybersecurity protocols. By identifying hardware vulnerabilities before manufacturing, risks can be eliminated long before third-party researchers uncover such problems, as is the case with several popular GPUs. Embedding security through semiconductor design in development and manufacturing is becoming increasingly important.

This approach pushes companies to integrate security measures into every stage of the semiconductor lifecycle, from design to deployment to maintenance. By prioritizing early processes, companies can strengthen components and technology against the risk of future cyberattacks by eliminating vulnerabilities.  

Cybersecurity in the semiconductor industry is not just the responsibility of individual companies. It requires collaboration among manufacturers, suppliers, government agencies, and industry associations. Initiatives like the Semiconductor Industry Association’s (SIA) cybersecurity guidelines encourage stakeholders to work together to protect the semiconductor ecosystem.

Public-private partnerships also play a vital role in addressing cybersecurity challenges. Governments can provide intelligence on emerging threats, while private companies can offer technological solutions and expertise. By fostering a collaborative approach, the industry can stay one step ahead of cyber adversaries and mitigate potential risks more effectively.

Furthermore, chip designers must prioritize built-in security features, such as hardware-based authentication and encryption, to protect devices from tampering or data breaches. This includes third-party IP (3PIP), where increased documentation transparency and accountability for the security of IP components can ensure safe integration into larger systems.  

Like counterfeit components, cyber threats will likely remain an issue, meaning organizations must consistently improve old systems. The first step is to take proactive steps in design; the second is to establish clear cybersecurity risk management guidelines and baseline standards. It is crucial to have well-understood and accepted cybersecurity guidelines across an organization.

Lastly, cybersecurity experts believe that utilizing AI to help combat cyber threats, thanks to AI’s fast response time and data-driven approach, can help companies better anticipate threats. Similarly, AI will help accelerate innovation within the cybersecurity sector, bolstering efficiency and resiliency.

Knowing cyberattacks' detriment to national security, governments enact stricter regulations to safeguard critical technology. The European Union’s NIS2, the EU AI Act, and the EU Chips Act are helping organizations prepare for compliance, as many see these regulations to boost their cybersecurity maturity. Using these regulations as a springboard to help grow and develop new practices, organizations will become better at staying ahead of evolving regulations to avoid fines and cyber threats, killing two birds with one stone.  

Prioritize Data Intelligence to Secure Components for Security Efforts

Simply put, cybersecurity's importance in the semiconductor industry cannot be overstated. Semiconductors have transformed from an option to a need in most markets, now vital for economic stability, national security, and technological innovation. As a result, semiconductor companies have become a prime target for cybercriminals. These threats are becoming more sophisticated as technology develops, and these attacks can cause upwards of millions to be lost from interrupted operations or, worse, stolen IP.

To ensure companies protect their assets, developing security guidelines alongside AI can help businesses become more proactive in addressing vulnerabilities. Sourceability’s market intelligence tool, Datalynq, can help organizations identify components prone to market disruptions through data-driven insights. With this knowledge, organizations can ensure they make strategic decisions when securing electronic components before disruptions occur.

Suppose a component is identified as a design risk due to obsolescence, lack of multi-source availability, or inventory levels. In that case, companies can use Datalynq’s case management system to develop a plan to combat it. Datalynq’s predictive analytics can help identify chokepoints long before they become an issue or impact a company’s supply chain.

Creating better cybersecurity standards and automated technology to help ensure safety is critical to overcoming future risks. Sourceability and Datalynq will help you combat problems with accurate insights and a robust sourcing team.