Former digital minister warns TSMC faces rising cybersecurity risks

Taipei, Dec. 10 (CNA) Cyberattacks could be the most effective way for hostile actors to damage Taiwan's semiconductor advantage, former Digital Affairs Minister Huang Yen-nun (黃彥男) warned on Wednesday, urging companies such as Taiwan Semiconductor Manufacturing Co. (TSMC) to strengthen precautions.

TSMC has become "too big to fail," making it essential to anticipate and manage potential risks, Huang said at an Academia Sinica conference on geopolitics and chip strategy.

Now head of Academia Sinica's Taiwan Information Security Center, Huang said TSMC's global influence has grown with AI, making any disruption to its production a national security concern.

While challenges such as water and electricity persist, he stressed that cyber and digital threats are the most serious concerns.

Huang identified two main types of attackers targeting TSMC. The first are state-backed hackers, many linked to China, including APT41, which seek to steal commercial secrets in chip design and manufacturing.

The second are profit-driven ransomware gangs, who often attack supply chain companies because even brief production halts are extremely costly. In a severe attack, Huang warned, TSMC might be forced to pay ransom.

Despite strict defenses, vulnerabilities remain, including outdated operating systems on older machines, weak links in the supply chain, and human errors even in closed networks, Huang said.

He noted that TSMC's large size adds to its management challenges. The company relies heavily on external equipment and has over 80,000 employees, he said, explaining that past internal leaks underscore the difficulty of controlling human-related risks.

Former Vice Premier Shih Jun-ji (施俊吉), who was also at the conference, said TSMC is indispensable to Taiwan, the global AI sector, and the United States. Its market value now exceeds Taiwan's annual GDP -- a rare phenomenon that is both a point of national pride and a warning sign, he said.

Shih noted that the U.S. sees TSMC's American investment as a way to boost its domestic semiconductor capacity.

He also cited former U.S. defense official Elbridge Colby, who warned that the U.S. would "destroy" TSMC if it fell into enemy hands.

Taiwan can leverage its semiconductor strength to influence future strategy, Shih said, noting that earlier this year it even considered using chip export controls against South Africa.

Taiwan's Ministry of Economic Affairs (MOEA) announced in September export controls requiring prior approval for products such as integrated circuits (IC) and chips shipped to South Africa.

The MOEA said at the time that the measure was a response to South Africa's repeated downgrading and renaming of Taiwan's representative offices in the country, which Taipei considers to be driven by political pressure from Beijing intended to reduce Taiwan's standing internationally.

Taiwan later suspended the tech export rules after South Africa agreed to talk.

As of last month, both sides were still reviewing a new agreement proposed by the South African government to regulate the status of reciprocal representative offices.

Taiwan's government said it was keeping its options open on whether to resume plans for retaliatory measures against South Africa, including controls on chip exports, pending bilateral talks on the proposed agreement.