Infineon has made chips that lock away encryption keys and other sensitive information inside things like smartphones into a pillar of its business. Now it is sharing its expertise in hardware and software security with companies in China eager to sell household appliances linked to the internet.
Infineon last week announced that it had jointly opened a research center in Beijing, called the Open Laboratory for Smart Home Interconnection Security, to develop stronger security technology for household devices. It is perhaps a sign that China’s fear of cyberattacks outweighs its wariness toward foreign chipmakers and internet companies.
China has been trying to break its habit of binging on foreign semiconductors. In 2013, the country spent $232 billion on importing foreign chips, more than it spent on petroleum. The effort has included erecting obstacles for chipmakers like Qualcomm to do business in the country. Last year, Qualcomm fought antitrust allegations in China, which forced the company to lower its licensing fees for cellular chips used in smartphones.
The Chinese government also remains skittish about the potential for foreign chips to be used in foreign surveillance. In 2015, Chinese officials announced plans to test domestic versions of chips embedded in passports and identity cards, like the security chips built by foreign companies like Infineon and Dutch chipmaker NXP Semiconductors.
Infineon, based in Neubiberg, Germany, is only member of the research initiative not from China. But it has spent years selling tiny security chips for credit cards and public transportation tickets in cities like Shenzhen, Guangdong Province. Infineon's China division has its headquarters in Shanghai and a manufacturng plant in Wuxi.
The other members include messaging and gaming giant Tencent, as well as the home appliance maker Midea and Huawei. Also involved is the China Electronics Standardization Institute, or CESI, which ratifies technology standards under the supervision of the Ministry of Industry and Information Technology.
"Together, we want to develop standards to better protect connected smart home appliances that are increasingly part of the Internet of Things," said Helmut Gassel, a member of the management board of Infineon, in a statement. "The joint lab is a major step forward in increasing consumers’ privacy."
China is the fastest growing market for smart appliances, which range from tiny sensors inside refrigerators to smart home gateways with a full operating system and user interface. These devices can be connected to the internet using an IP address, making them potentially vulnerable to attacks. Consumers in China are expected to buy 223 million smart home devices in 2020, up from 15 million in 2016, according to research firm IHS Markit.