Chinese espionage on Dutch semiconductors “intensifying”

China is increasingly spying on Dutch semiconductors and other high-tech areas, Dutch Defence Minister Ruben Brekelmans said on Saturday.

"The semiconductor industry, which we are technologically leading, or technology advanced, of course, to get that intellectual property - that's interesting to China," Brekelmans told Reuters on Saturday at the Shangri-La Dialogue security forum in Singapore.

In April last year, the Dutch intelligence services released an annual report noting China’s increased activity in spying on the Dutch semiconductor, aerospace, and maritime industries.

Commenting on the threat, Brekelmans said: "It's continuing. In our newest intelligence reports, our intelligence agency said that the biggest cyber threat is coming from China, and that we do see most cyber activity when it comes to us being as from China. That was the case last year, but that's still the case. So we only see this intensifying."

He added that the Netherlands is focusing more on security as China is "using their economic position for geopolitical purposes and also to pressure us.”

Despite significant catch-up in its race for semiconductors, China is still lagging behind global leaders overall.

“Ten years ago, [Chinese semiconductor companies] were two generations behind. Five years ago, they were two generations behind, and now they’re still two generations behind,” G. Dan Hutcheson, vice chair of research firm TechInsights, said.

And yet, China is making impressive progress. In 2021–2022, 55% of global semiconductor patent applications were Chinese, more than double that of American patents.

Despite semiconductor design firms in China increasing nearly sixfold between 2010-2022, Chinese design firms still accounted for only 8% of global design revenue in 2022, with no Chinese firms among the top 25 global design firms.

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