China’s Espionage Playbook: Unveiling the Cyber Campaign Against East Asian Semiconductor Companies

Estimated read time 4 min read

Introduction: The Silent War in the Semiconductor Space

In an era where data is the new oil, semiconductors are the new pipelines. These tiny components power everything from your smartphone to global communication networks. It’s no surprise then that they’ve become the latest battlefield in cyber-espionage activities.

Recent research by Dutch cybersecurity firm EclecticIQ has revealed a new espionage campaign1 targeting the semiconductor industry in East Asia. The culprits? Chinese state-backed hackers, belonging to a group commonly known as Budworm or APT27. Let’s dive into the mechanics, tools, and implications of this campaign.

Budworm (APT27): A Brief Background

Before delving into the current campaign, it’s crucial to understand the group behind it. Budworm, or APT27, is not new to the game. They have previously targeted Middle Eastern telecom organizations, an Asian government, and even a U.S. state legislature. Their activities reflect a well-coordinated, state-backed operation with both regional and global objectives.

Impersonating Giants: The TSMC Deception

One of the most cunning tactics employed by the attackers was posing as Taiwan Semiconductor Manufacturing Company (TSMC), a heavyweight in the semiconductor industry. TSMC supplies microchips to leading tech companies like Apple and Nvidia. By masquerading as TSMC, the hackers aimed to exploit the trust and business relationships that potential victims have with the company. This shows a high level of social engineering and awareness of the industry dynamics.

The Technical Arsenal: Cobalt Strike, HyperBro, and ChargeWeapon

Now let’s talk about the tools of the trade. The campaign utilized a mix of off-the-shelf and custom-developed malware:

Cobalt Strike Beacon

Cobalt Strike is a legitimate penetration testing tool that has been subverted for malicious use in numerous cyber-attacks. In this campaign, it served as a beacon to remotely issue commands and exfiltrate data from infected systems.

HyperBro Loader

The HyperBro loader served as the initial foothold, facilitating the installation of the Cobalt Strike beacon. When executed, the loader would display a PDF file purporting to be from TSMC, further enhancing the deception.

ChargeWeapon Backdoor

Lastly, the hackers deployed a new backdoor called ChargeWeapon. This backdoor was designed to perform initial reconnaissance by sending device and network information back to an attacker-controlled server. The backdoor’s capabilities could potentially pave the way for more targeted attacks on high-value systems within the victim organization.

The Attack Vector: Phishing Hooks

While EclecticIQ’s report didn’t specify the initial attack vector, it’s plausible that phishing emails served as the entry point, given Budworm’s previous modus operandi. The email would likely contain malicious links or attachments that, when clicked, would execute the HyperBro loader, setting the stage for the subsequent phases of the attack.

Convergence with Other Campaigns

Interestingly, this campaign’s revelation comes on the heels of another China-linked espionage operation against governmental agencies in Guyana, using a backdoor known as DinodasRAT. This was highlighted by the cybersecurity company ESET. This indicates a broader strategy by Chinese state-backed hackers targeting various sectors and geographical regions, perhaps to gain competitive or geopolitical advantages.

Operation Jacana: Foundling hobbits in Guyana
Operation Jacana: Foundling hobbits in Guyana

Conclusion: A Wake-up Call for the Industry

The targeting of semiconductor companies should serve as a wake-up call for an industry central to modern technology. The campaign’s sophistication, from its social engineering tactics to its use of a multi-tool arsenal, highlights the urgent need for robust cybersecurity defenses. As global tensions manifest in the cyber realm, it’s increasingly clear that cybersecurity is not just a technical issue but a critical facet of national and economic security.

The ongoing cyber-espionage activities by groups like Budworm signal a new kind of warfare—one that is fought in the shadows of the internet but has real-world implications. It’s a war that requires not just advanced technology but also a deep understanding of the geopolitical landscape and the nuances of each targeted industry.

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Reza Rafati

Reza Rafati, based in the Netherlands, is the founder of An industry professional providing insightful commentary on infosec, cybercrime, cyberwar, and threat intelligence, Reza dedicates his work to bolster digital defenses and promote cyber awareness.

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