TAIPEI (Taiwan News) — Former Digital Affairs Minister Huang Yen-nan (黃彥男) has warned that hostile actors may see hacking TSMC and its suppliers as a more practical way to damage Taiwan’s “silicon shield” than using military force.

Speaking at an Academia Sinica conference on geopolitics and chip strategy, Huang said TSMC’s role in advanced semiconductors has grown so large it is now “too big to fail” for Taiwan and the global AI industry. The company’s market value surpasses Taiwan’s annual GDP, per CNA.

Huang, who heads Academia Sinica’s information security research center, argued that penetrating TSMC through its networks could in some scenarios be more effective than physical attacks.

He said the company faces two main types of adversaries. The first is state-sponsored hacker groups tied to China, such as APT41, that are trying to steal trade secrets in chip design and manufacturing.

The other major threat comes from ransomware gangs motivated purely by profit, Huang said. These groups deliberately go after supply chains because they know the cost of any production stoppage is huge. He warned that in a serious incident TSMC could be forced into paying to restore operations.

While familiar challenges around water and electricity remain, Huang said the most pressing risks are in network security and digital attacks. He pointed to legacy operating systems on older tools, weak points in supplier cybersecurity, and human error on supposedly closed networks.

Huang noted that in recent years, ransomware and hacking incidents involving TSMC suppliers show the semiconductor supply chain has already become a prime target. With more than 80,000 employees and extensive outside equipment, managing people and processes may be the company’s hardest security problem.