Industry leaders like Samsung Electronics, Taiwan Semiconductor Manufacturing Co., Infineon Technologies, SK Hynix and Sony, all still use massive amounts of American technologies on their production lines and in their development processes, giving Washington a veto over their product sales. “Paying their bribes was an example of long-term thinking that was extraordinary for us,” said a former senior counterintelligence official. How Washington's sanctions boosted China's semiconductor sector Corrupt officials, even if they hadn’t been recruited by the CIA while in office, also often sought refuge overseas—where they could then be tapped for information by enterprising spy services. But these were from day one, from the airport onward,” the former official said. The second part covers how U.S. intelligence under Barack Obama struggled as Xi Jinping consolidated his power. Party corruption was becoming a public problem, acknowledged by the CCP leadership itself. In central processing units, the U.S. maintains a tight grip, with leaders including Intel and Advanced Micro Devices that dominate more than 90% of the global market. This “was not random or generic,” this source said. “And they know that.” China’s new aggressive moves to track U.S. operatives were likely a response to these U.S. efforts. Bringing the world to the verge of a war, the crisis was resolved when the Soviet Union conducted a secret agreement with Cuba; and the U.S. dismantled the nuclear warheads in Turkey. "The clock is ticking because they still know that the U.S. could hit the local industry hard," said Roger Sheng, a chip analyst at consultancy Gartner. In some cases, details from background investigations tied to the granting of security clearances—investigations that can delve deeply into individuals’ mental health records, their sexual histories and proclivities, and whether a person’s relatives abroad may be subject to government blackmail—were stolen as well. Apple cutting the social media giant off from iPhone user data could force a healthy change. Martijn Rasser, a senior fellow of the technology and national security program at Center for a New American Security, told Nikkei: "China's goal of total self-sufficiency in semiconductors is unrealistic. It was how the CIA got “disaffected people up in the ranks. See the full graphic at the end of this article for more of China's upcoming chipmakers. "We have to recognize and realize that we are still far lagging behind instead of thinking that we could quickly rock the world. A Chinese disputed Himalayan border was the main cause of the war. "Previously, domestic chip manufacturers only used leading production equipment that all the other top global chipmakers like Samsung and Intel also use in their production lines," another manager with a China-based chipmaker told Nikkei, preferring not to be named. “We looked at it very carefully,” said the former senior CIA official. Liberal Senator Jim Molan told Sunrise on … Fundamentally, current and former U.S. officials say, China believes data provides security: It ensures regime stability in the face of internal and external threats to the Chinese Communist Party (CCP). "In the short term, due to geopolitical uncertainties, China's tech development could be slowed a bit," said Miin Wu, founder and chairman of Macronix International, a leading memory chipmaker in Taiwan that serves Apple, Sony and Nintendo. Part 2: Beijing Ransacked Data as U.S. Sources Went Dark in China, Part 3: As Trump’s Trade War Raged, Chinese Spy Agencies Enlisted Private Firms. China - China - War between Nationalists and communists: In the meantime, the communists had created 15 rural bases in central China, and they established a soviet government, the Jiangxi Soviet, on Nov. 7, 1931. {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}}, remain far short of the required standard, added a further seven Chinese supercomputer makers. Despite China's considerable efforts, few experts believe that its chip sector will ever be genuinely free of U.S. parts. But after the OPM breach, anomalies began to multiply. YMTC is seeking to learn as much as it can about the origin of everything that goes into its products, from production equipment and chemicals to the tiny lenses, screws, nuts and bearings in chipmaking machinery and production lines, multiple sources familiar with the matter said. An official who wasn’t participating in corruption was deemed a fool or a risk by his colleagues. The collective effort has occupied over 800 people, full time, and including staff from its multiple local suppliers, for two years. It was a combination of those threats that created the impetus for China’s most aggressive counterintelligence campaign against the United States yet. In the U.S.-Soviet Cold War, intelligence largely came in piecemeal and partial form: an electronic intercept here, a report from a secret human source there. "Senior management is raising targets of using locally built chip production machines almost every month, and they hope we could at least know what kind of alternatives we have and have a Plan B of the production line that will be free from U.S. control," one of the people told Nikkei. Within the CIA, China’s seething, retaliatory response wasn’t entirely surprising, said a former senior agency official. That has spurred an aggressive effort by Beijing to identify and replace risky parts and suppliers. And that had to do with the bribe and promotion process,” said the former senior counterintelligence official. But this was not done once, and wasn’t done just in the [Chinese military],” recalled a current Capitol Hill staffer. "It's likely that we are looking at more precisely confined export controls at some areas such as military uses and areas that are really linked to national security," Bown said. With the CIA’s carefully built network of Chinese agents utterly destroyed, the debate over how to handle China would become increasingly contentious—even as China’s ambitions grew. "However, in reality, it will take a lot of time and great execution and we don't expect to see them cut significantly from the amount of chipmaking equipment procurement from the U.S. very soon.". TSMC's share of revenue from China plunged to 6% in the January-March period from 22% the same time a year earlier. The average income remained under 2,000 yuan a month (approximately $240 at contemporary exchange rates), but officials’ informal earnings vastly exceeded their formal salaries. China Used Stolen Data to Expose CIA ... Around 2013, U.S. intelligence began noticing an alarming pattern: Undercover CIA personnel, flying into countries in Africa and Europe for sensitive work, were being rapidly and successfully identified by Chinese intelligence, according to three former U.S. officials. To be sure, China had stolen plenty of data before discovering how deeply infiltrated it was by U.S. intelligence agencies. YMTC has been mass-producing 64-layer chips for two years and has just started mass-producing 128-layer chips at its NAND flash memory factory in Wuhan. Both Brahmaputra and the glaciers that feed Ganga originate in China. A rather striking and bizarre omission. It was confirmation of new threats we already knew existed.”, There were other bad omens. With the guidance of Beijing, it has launched a massive review of its supply chain in an effort to find local suppliers -- or, at least, non-U.S. ones -- to replace the current dependence on American technology. The best way, under the geopolitical climate, is to keep our head low and do our work and grow silently," said a chip executive with ChangXin Memory Technologies, another of China's key memory chipmakers, based in Hefei, Anhui Province. The US is waging an economic, propaganda, and military cold war against China, heightening tensions and increasing the risk of future confrontations. "Not only is our production capacity fully booked for 2021 and needs to expand ... but also many of our peers' capacities are fully reserved," the executive said. He's wrong, however, to put it in the future tense. China's dam-building over Brahmaputra risks water war with India 24 Jan, 2021, 01.47 PM IST. One example is that YMTC and other domestic chip companies, such as China's top contract chipmaker, Semiconductor Manufacturing International Co., have begun to stockpile "at-risk" parts in a jointly owned warehouse that just went into operation this year, sources told Nikkei Asia. Kissinger's secret trip in (Pakistan's dismemberment year) 1971 paved the way for US-China relations. During the Cold War it had been hard to guarantee the rise of the CIA’s Soviet agents; the very factors that made them vulnerable to recruitment—greed, ideology, blackmailable habits, and ego—often impeded their career prospects. Data has already critically shaped the course of Chinese politics, and it is altering the course of U.S. foreign policy and intelligence gathering around the globe. The Chinese Civil War was a civil war in China fought between the Kuomintang (KMT)-led government of the Republic of China (ROC) and forces of the Chinese Communist Party (CCP) lasting intermittently between 1927 and 1949. "It's really an irreversible trend that China wants to switch to local suppliers," said Li of Bernstein, "but in reality and in real practices, there are still hurdles and could still take a lot of time. "After all, it's a trade-off. Despite previous plans to wean itself off foreign chips, China is still largely dependent on imports. NAIROBI, Kenya (AP) — Ethiopia has swept up thousands of ethnic Tigrayans into detention centers across the country on accusations that they are traitors, often holding them for months and without charges, the AP has found. The capability was there and was being utilized.” China had also stepped up its hacking efforts targeting biometric and passenger data from transit hubs, former intelligence officials say—including a successful hack by Chinese intelligence of biometric data from Bangkok’s international airport. By far the most preferred course of action is not to fall into Washington's crosshairs. These tools are 90%-dominated by U.S. companies such as Synopsys, Cadence Design Systems, Ansys and Siemens EDA (which, before its acquisition, was known as Mentor Graphics and is still located in America). Investigation: There are also guaranteed orders with other Chinese chipmakers and domestic tech giants like Xiaomi, Oppo, Vivo and Lenovo. Harley Schlanger returns to discuss Ukraine, Russia, and China. But Pillsbury talks very little, or not at all, about their Communist ideology. Neither is it practical for the U.S. to exclude China from all of its supply chains, as the country is still a big source of critical raw materials and rare-earth elements used in semiconductors and electronic components, according to a recent report by the Semiconductor Industry Association, an American industry organization. There would be no contest for troops between regions, only for supplies, and only if both wars were extensive, which is doubtful. "However, in the longer run, from China's perspective, it will definitely hope to build a competitive industry. Within the soviet regions, the communist leadership expropriated and redistributed land and in other ways enlisted the support of the poorer classes. Applied Materials, for example, leads the world in chip production technology such as ion implantation, physical and chemical vapor deposition, and chemical-mechanical polishing; Lam Research makes etching, chemical vapor deposition and wafer-cleaning equipment. ©, Nikkei montage/Source photo by Getty Images, US-China tech war: Beijing's secret chipmaking champions, CHENG TING-FANG and LAULY LI, Nikkei staff writers, "Skyscraper": The 32-layer 3D NAND flash chip developed by Yangtze Memory Technologies Co. But in the newly rich China of the 2000s, dirty money was flowing freely. This war over data has taken on particularly critical importance for the United States’—and China’s—spy agencies. We cut through the propaganda and work towards the truth. Despite shortages, the global chip industry is preparing for a massive glut as companies like Yangtze Memory hit their stride. He frames China as being run by the "war hawks." "We have to strengthen self-innovation and to make breakthroughs in some core technologies as soon as possible," Chinese President Xi Jinping told a group of economic and social experts in remarks published in January. But instead, CIA officials believed the answer was likely data-driven—and related to a Chinese cyberespionage campaign devoted to stealing vast troves of sensitive personal private information, like travel and health data, as well as U.S. government personnel records. The question is whether the psychopaths who want war … And it's getting worse. However, most also believe that the doomsday scenario -- a complete blockade of China's tech and semiconductor industries -- is not realistic, either. On April 12, the White House hosted a virtual CEO summit on semiconductor and supply chain resilience, which included the world's top three chip producers -- Intel, Samsung and TSMC -- as well as multiple executives from carmakers, including Ford Motor and General Motors, to discuss how to maintain U.S. leadership in the global semiconductor industry. China is “one of the leading collectors of bulk personal data around the globe, using both illegal and legal means,” William Evanina, the United States’ top counterintelligence official, told Foreign Policy. The administration has also proposed a $50 billion funding program for chip manufacturing and research and development, mirroring China's efforts. Before Xi’s purges, petty corruption within the agency was ubiquitous, former U.S. intelligence officials say, with China’s spies sometimes funneling money from operations into their own “nest eggs”; Chinese government-affiliated hackers operating under the protection of the Ministry of State Security would also sometimes moonlight as cybercriminals, passing a cut of their work to their bosses at the intelligence agency. It's already here. The Chinese Communist Party "aggressively plans to reorient and dominate the semiconductor supply chain," Biden said in opening remarks of the virtual CEO summit, quoting a bipartisan letter from 23 senators. All while it pursues "Plan B" of self-sufficiency, YMTC still sees it as extremely unrealistic to strip all foreign equipment from its production site. For Chinese companies, therefore, localization efforts must be carried out quietly. It is a frustrating area of dependence for China, which imported $350 billion worth of semiconductors last year, according to the China Semiconductor Industry Association. The two at war with the U.S. at the center would not achieve a dilution of forces, nor could Russia or China support the other. That restricted the software used by HiSilicon to lay out blueprints for integrated circuits as well as printed circuit boards and other electronic systems. Biden needs to get it right. In a major conflict with either China or Russia, the first shot in the war could be a space burst of a super EMP weapon designed to knock out U.S. nuclear command and control and weapons. In the years since Mao Zedong’s communist revolution in 1949, relations between the People’s Republic of China and the United States had been clouded by Cold War … The Chinese government refers to such technologies as "neck-choking," referring to potential points of U.S. pressure. If they want to grow faster and quickly gain more business, it's more practical that they still use the tools and equipment that all of the foreign market leaders also use.".   © AP, Yangtze Memory Technologies Co. plant in Wuhan. "Previously, when China talked about self-sufficiency, they were thinking about starting to cultivate some viable chip developers that could compete with foreign chipmakers," a chip industry executive told Nikkei. “So OPM wasn’t some kind of eye-opener. "China and the rest of the world is not waiting, and there's no reason why Americans should wait," he said. While the threat of sanctions hangs over them, so too does the largesse of state aid -- subsidies and investment from local governments and the private sector have amounted to at least $170 billion since 2014, according to the state-backed China Securities Journal. The Netherlands has halted shipments of China's first orders of the EUV machine amid U.S. pressure since 2019, Nikkei Asia first reported in November of that year. So far, the Biden administration has not yet softened on China's technological advancement. Based in the city of Wuhan, the effort did not pause even when the virus epicenter was ravaged by COVID-19 last spring. The shifting nature of war has made peacemaking more difficult. The CIA’s incredible recruiting successes “showed the institutional rot of the party,” said the former senior CIA official. From China trade wars and tensions with Australia and the United States, to conflict in the South China Sea, find all your news at news.com.au “The concern just wasn’t that [the OPM hack] would curtail info inside China,” said a former senior national security official. ", It's like when you want to drink milk -- but you not only need to own a whole farm ... breed dairy cows ... build barns, fences ... all by yourselves". And by 2049, which is the 100th anniversary of the founding of the People's Republic, China means to be unambiguously number one, including, [says] Xi Jinping, an army that he calls "Fight and Win." In 2020, China-based chip production accounted for only 15.9% of the domestic market, the firm estimated in January, predicting it would reach only 19.4% in 2025. "That also means these local players finally have a chance to practice and really upgrade their products in an atmosphere that the whole country is rooting for this," he said. 1 min ago It was around this time, said a former senior NSA official, that Chinese intelligence agencies transitioned from merely being able to steal large datasets en masse to actually rapidly sifting through information from within them for use. U.S. officials believed Chinese intelligence operatives had likely combed through and synthesized information from these massive, stolen caches to identify the undercover U.S. intelligence officials. Removing this source of U.S. leverage over its economy became a national priority two years ago, when Washington put sanctions on China's biggest telecommunications equipment maker, Huawei Technologies, amid spying allegations that the Chinese company has constantly denied. As an upstream riparian region, China maintains an advantageous position and can build infrastructure to intentionally prevent water from flowing downstream. In the intelligence world, “information is king, and the more information, the better,” said Steve Ryan, who served until 2016 as deputy director of the National Security Agency’s Threat Operations Center and is now the CEO of the cybersecurity service Trinity Cyber. But privately, U.S. officials believe, Chinese leaders also feared the degree to which corruption had allowed the CIA to penetrate its inner circles. Sometimes, the surveillance was so overt that U.S. intelligence officials speculated that the Chinese wanted the U.S. side to know they had identified the CIA operatives, disrupting their missions; other times, however, it was much more subtle and only detected through U.S. spy agencies’ own sophisticated technical countersurveillance capabilities. The equipment used to manufacture high-end computer chips is virtually an American global monopoly. Worries about what the Chinese now knew precipitated an intelligence community-wide damage assessment surrounding the OPM and other hacks, recalled Douglas Wise, a former senior CIA official who served deputy director of the Defense Intelligence Agency from 2014 to 2016. Stay ahead with our exclusives on Asia; the most dynamic market in the world. This series, based on extensive interviews with over three dozen current and former U.S. intelligence and national security officials, tells the story of that battle between the United States and China—a conflict in which many believe China possesses critical advantages, because of Beijing’s panopticon-like digital penetration of its own citizens and Chinese companies’ networks; its world-spanning cyberspying, which has included the successful theft of multiple huge U.S. datasets; and China’s ability to rapidly synthesize—and potentially weaponize—all this vast information from diverse sources. By the late 2000s, U.S. intelligence officials had observed a notable professionalizing of the Ministry of State Security, China’s main civilian intelligence agency. U.S. intelligence agencies altered their screening procedures to anticipate new, more finely tuned Chinese attempts at human spying, Wise said. By Zach Dorfman ... a report from a secret … As the threat of sanctions hits close to home, however, these same producers are increasingly exploring domestic-made alternatives to the top-end U.S.-made technology, the manager said. The Cold War is Here. At the time, CIA assets were often handsomely compensated. China is a massive consumer market, and if you restrict a lot of semiconductor shipment, many U.S. companies will be hurt too.". Meanwhile, suppliers are asked to provide corrective action reports to explain how they can together diversify procurement and find alternatives. AND THAT HAD TO DO WITH THE BRIBE AND PROMOTION PROCESS,” SAID THE FORMER SENIOR COUNTERINTELLIGENCE OFFICIAL. It is said to be in the process of developing a 192-layer chip that one industry analyst referred to as the "Himalaya." But the company is taking no chances. Under Xi’s crackdown, these activities became increasingly untenable. © AP, "Neck choking" technology: U.S. President Joe Biden holds a chip prior to signing an executive order aimed at addressing a global semiconductor shortage in Feb. 2021. YMTC, for one, is followed closely by China's leadership, supervised by officials in the State Council -- the country's top administrative authority -- as well as the China Integrated Circuit Industry Investment Fund, the nation's premium seed fund for the semiconductor industry, which also owns a 24% stake, two people with direct knowledge told Nikkei. Some worried that China might have purposefully secretly altered data in individuals’ OPM files to later use as leverage in recruitment attempts. At the CIA, these anomalies “alarmed chiefs of station and division leadership,” said the first former intelligence official. U.S. officials also wondered whether the OPM hack could be related to an uptick in attempted recruitments by Chinese intelligence of Chinese American translators working for U.S. intelligence agencies when they visited family in China. But that, crucially, has now changed. However, the U.S. sanctions may have removed the main domestic obstacle to the goal of China's chip self-sufficiency effort, which is the lack of cooperation by China's own local buyers. “We can’t get to them in Beijing, but can in Djibouti. Kissinger told Zhou that he'd made a secret trip to Paris to meet North Vietnamese representatives and that the U.S. was prepared to … U.S. intelligence under Barack Obama struggled as Xi Jinping consolidated his power the institutional rot of the party, the... Far fallen short of this goal, according to people familiar with the 's! Ymtc mobilized hundreds of engineers, including careers, and there is no turning back ``... 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