Seclored: The Data Security News Blog

Data Security Challenges in the Semiconductor Industry

When it comes to data security, the industry faces some unique challenges due to the sharing of sensitive intellectual property across a sprawling supply chain and the ever-present threat of a data breach.

The semiconductor industry is no stranger to data security breaches. In fact, according to a recent study by Gartner, it is the most targeted by cybercriminals, with 39% of surveyed organizations experiencing a breach in 2018.

The semiconductor industry is highly complex and regulated, with strict compliance requirements for handling-controlled items, data, and technologies. To ensure compliance, semiconductor companies must thoroughly understand the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). Semiconductor companies must be familiar with both sets of regulations to classify their products and ensure compliance correctly.

Managing an Increasingly Complex Supply Chain

The global nature of the semiconductor industry, and the fact that most chips are made using raw materials sourced from numerous suppliers worldwide, make managing the supply chain complex and increases the risk of vulnerabilities and security breaches.

A recent study found the Covid-19 pandemic to be the decade’s single most disruptive event for global manufacturing supply chains.* (

Data Security Challenges


Securing the Supply Chain: Ensuring Data Security at Every Step of Production

Semiconductor production is a complex process involving multiple steps with multiple suppliers with sensitive information shared along the way. If data security is not managed at every production stage, it’s only a matter of time before a breach occurs, creating severe consequences, such as heavy financial damage, loss of human life, and even a threat to national security.

The best way to overcome this challenge is to have a comprehensive data security plan that covers every step of production – from sourcing raw materials to finished shipping products. This plan should include detailed protocols for handling sensitive data and should be reviewed and updated regularly.

Here are some simple ways:

  • Preventing copying data and securing strong passwords
  • Safe storage of qualifications (encrypted credentials)
  • Ensuring data privacy while complying with different regulations
  • Track and detect device well-being and inform in case of suspicious activity

Since industrial specialization is necessary for semiconductor production, the close cooperation between the semiconductor industry’s upstream and downstream organizations ensures a holistic cybersecurity strategy that protects our factory’s supply chain from attacks and data theft.

Protecting Intellectual Property

The rate of innovation within the industry is staggering, while production methods are constantly evolving. This rapid pace of change can make it challenging to keep up with the latest data security best practices and how to apply them in a changing environment. This lag between innovation and data security adoption can level intellectual property vulnerable.

Intellectual Property Challenges

To overcome this challenge, it’s essential to partner with a data security provider specializing in the semiconductor industry who is constantly up to date on the latest trends and security best practices. The right vendor can also help you develop custom solutions that address your specific data security needs.

Key Compliance Regulations in Action for the Semiconductor Industry

Data compliance serves a greater purpose beyond just avoiding fines and penalties. With the rising level of cyber-attacks and their complexity, proper administration of security practices and supervision through data compliance ensures that the data is safe from theft, loss, misuse, or compromise.

International Traffic in Arms Regulations (ITAR) and Export Administration Regulation (EAR)

Issued by the United States Department of Commerce, Bureau of Industry and Security (BIS) under laws relating to the control of certain exports, reexports, and activities. The ITAR are regulations that control the export of defense-related items and technologies, while the EAR regulates the export of commercial and dual-use items.

There are several ITAR and EAR compliance requirements that semiconductor companies must meet, including:

  • Ensuring that only U.S. persons have access to ITAR-controlled items and technologies
  • Preventing the release of ITAR-controlled technical data to foreign nationals without prior authorization
  • Implementing a compliance program that includes documentation, tracking, monitoring, and auditing of shipments and related data
  • Maintaining records of all ITAR-controlled items and technologies.

Failure to comply with ITAR or EAR requirements can result in severe penalties, fines, and jail time for all ITAR-controlled items and technologies.

The National Institute of Standards and Technology (NIST)

The National Institute of Standards and Technology (NIST) released a new version of the document S.P. 800-161r1[8] on cybersecurity supply chain risk management in May 2022 to help all circles understand supply chain risks and guide enterprises to manage risks effectively.

The document pointed out that supply chain security risks may come from:

  • Theft of confidential information by system integrators’ insiders
  • Agents working for the specific country put malware into products provided by suppliers
  • Reuse vulnerable code and the proposed 18 domains for effectively managing supply chain cybersecurity risks.

Seclore’s Digital Asset Protection and Control

Privacy regulations revolve around user consent, the purpose of data usage, and data breach control. Here’s a four-point checklist to determine if your organization is complying with the regulations:

  • WHO can access the data within the organization?
  • HOW does the organization protect data privacy when shared externally?
  • WHAT are the steps taken to revoke the data in case of a data breach?
  • CAN your organization track the flow of sensitive data?

Seclore’s Digital Asset Protection and Control has repeatedly proven its ability to enable organizations to:

  • Protect confidential information
  • Eliminate data leakage and data theft, especially while outsourcing business operations
  • Comply with the relevant guidelines and regulatory compliance obligations.

Isaac is the Chief Marketing Officer responsible for Seclore’s demand generation, brand, product marketing, and go-to-market strategy and execution. Isaac has more than 25 years of experience accelerating the growth of large and small tech companies, including Microsoft, Splunk, NVIDIA, Cisco, Extrahop, and Qumulo. His diverse career background spans product, marketing, sales, engineering, and business development roles.

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