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Chosun Chinese: 1.2 Million Korean DeepSeek User Information Handed to China

According to the South Korean Personal Information Protection Committee, as of January 31, 2025, the personal information of 1.21 million South Korean DeepSeek users had been transferred to ByteDance, the parent company of TikTok. The South Korean government has since banned downloads of the DeepSeek app, making South Korea the second country after Italy to ban DeepSeek.

The Personal Information Commission discovered that personal information was being exfiltrated to ByteDance during the confirmation process of DeepSeek’s network connection records. According to the Korean Domestic Personal Information Protection Law, one must specifically obtain informed consent from users when providing information to third parties; DeepSeek did not comply with this legal requirement.

American cybersecurity company Feroot Security deciphered DeepSeek’s code and confirmed that DeepSeek hides the ability to send user information to China Mobile, a state-owned communications company. DeepSeek even obtains the user’s keyboard usage patterns and does not allow the user to refuse collection of the user’s personal information.

Source: Chosun Chinese, February 18, 2025
https://cnnews.chosun.com/client/news/viw.asp?nNewsNumb=20250262403&cate=c01&mcate=

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STCN: IBM Chinese R&D Branch Closed

China Security Times (STCN) recently reported on an IBM internal decision stating that IBM China Investment Company (IBMV) and its branches will cease business activities starting March 1, 2025. Related office spaces will also be suspended.

IBM announced last August that it will withdraw all research and development work from China. The China System Laboratory work has been transferred to other IBM infrastructure bases overseas. The move this time only involves IBMV, which is mainly responsible for R&D and testing. The employees are located in many cities across the country, including Beijing, Shanghai, Dalian, etc., involving more than 1,800 people.

According to the financial report, IBM’s 2023 revenue in the Chinese market fell by 19.6 percent, becoming one of the main reasons for dragging down revenue growth in the Asia-Pacific region. In the first half of 2024, IBM’s sales in China fell again, down 5 percent year-over-year. In addition to R&D, IBM’s current business in China also includes consulting business (IBMC). According to information released by IBM last year, the number of IBMC Chinese customers has dropped by 45 percent in the past two years. Some IBM employees revealed that IBMC will also lay off employees this year.

Source: STCN, February 28, 2025
https://www.stcn.com/article/detail/1553350.html

Briefings | | |   Information/Technology US-China Relations

Lianhe Zaobao: Apple Plans to Manufacture Its Newest iPhone Model in India

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that the iPhone 16e model newly launched by Apple will be produced in India. This means that all five models of the iPhone 16 series will be produced in India.

Nearly all of Apple’s mobile phones currently sold in the United States are made in China, but supply chain disruptions concerns have prompted Apple to seek diversification of production. Apple’s largest OEM, Foxconn, has established assembly factories in India. It is expected that, by 2027, the proportion of iPhones made in India will rise from 15 percent now to 25 percent.

In tapping India, Apple will need to face challenges in the form of power shortages, lower manufacturing capacity (as compared with China), as well as tariff policy risk. If President Trump imposes Tariffs on India then iPhones exported from India to the United States would likely be subject to those tariffs. According to internal Apple sources, however, Apple believes that India is likely in a better position to negotiate with the United States as compared to China.

Source: Lianhe Zaobao, February 22, 2025
https://www.zaobao.com.sg/news/world/story20250222-5916146

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CBN: China Preparing Establishment of National Data Group Company

China Business Network (CBN) recently reported that, according to information from multiple authoritative channels, the Chinese State-owned Assets Supervision and Administration Commission of the State Council (SASAC) is preparing to establish a new central-government-owned company named National Data Group. A source close to the preparations said the move marks a critical step in China’s “data elements market.”

According to the CBN report, the new company is to “further integrate and optimize national data resources, promote efficient allocation and in-depth application of data elements.” The group will be tasked with “integrating, operating, and developing national-level data resources, covering multiple key areas in the economy such as energy, transportation, finance, medical care, and manufacturing, while promoting cross-industry and cross-regional flow and sharing of data.”

The National Data Group “will not just perform a simple resource accumulation, but also engage in a market-oriented and professional-oriented exploration of the commercial operation model of data resources.” The group “may take advantage of advanced digital technologies, such as artificial intelligence, blockchain, cloud computing, etc., to build safe and efficient data transaction and circulation mechanisms, while ensuring data security and privacy protection.”

Source: CBN, February 13, 2025
https://www.yicai.com/brief/102472113.html

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UDN: Chinese Chip Fab SMIC Saw Sharp Decline in 2024 Profits

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported on the 2024 annual report published by SMIC, China’s largest chip foundry. SMIC’s revenue last year reached US$8.03 billion, a year-over-year increase of 27 percent, ranking as the second-largest chip foundry worldwide by revenue. However, SMIC’s 2024 net profit was only US$490 million, a year-over-year decrease of 45.4 percent. The company stated that the decline in profit was mainly due to a “decline in return on investment.”

Around 89 percent of SMIC’s revenue comes from Mainland China. International industry analysts pointed out that SMIC shouldered the heavy responsibility in 2024 of helping Huawei break through U.S. sanctions by producing 7-nanometer chips, incurring very high production costs. This resulted in a significant reduction in profits. As one of the very few companies in Mainland China that have advanced processes for mass-production of computer chips, SMIC is expected to have higher pricing power domestically in the years ahead.

SMIC said that it expects its 2025 sales revenue growth to outperform that of comparable peers “assuming there is no major change in the external environment.”

Source: UDN, February 12, 2025
https://money.udn.com/money/story/5603/8542229

Briefings | | |   Information/Technology

CNA: DeepSeek Blocked by Multiple Countries for Security Concerns

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, Chinese AI chatbot DeepSeek shook the global industry overnight. However, from Washington DC to Seoul, multiple countries have prohibited its use on official devices citing security concerns.

Italy took the lead in taking action. The Roman authorities conducted an investigation on DeepSeek and banned it on Italian AppStore. Next, Taiwan prohibits government staff and key infrastructure employees from using DeepSeek, emphasizing the potential harm to national security. Australia followed suit a few days later. Then the South Korean Ministry of Defense, Ministry of Statistics and other ministries and police departments also prohibited the use of DeekSeek on military and government devices due to safety risks. In the United States, the state of Texas, the House of Representatives, the Department of Defense, the US Navy and NASA all banned DeekSeek on official devices and their networks.

The security concerns lie with the fact DeepSeek collects personal information and the chatbot can also collect a wide range of information in the conversation sessions with the users. In China, when the government requests, a company has legal obligations to provide user information regardless what is promised to the users. The Western countries start to realize it could be a national security issue given that DeepSeek is capable of collecting more data than other types of apps.

Source: CNA, February 7, 2025
https://www.cna.com.tw/news/aopl/202502070305.aspx

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UDN: TSMC Further Tightens Supply to Mainland China

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that, according to two people familiar with the matter, world’s largest dedicated independent semiconductor foundry TSMC will further tighten the compliance rules on Mainland China customers.

TSMC has notified multiple Mainland customers that, starting from January 31, 2025, if orders of 16 nanometers products or below are not packaged by the vendors in the US BIS “approved OSAT (certified third-party packaging company)” whitelist, and TSMC has not received any certifications from those packaging factories, then order shipments will be suspended. US BIS is Department of Commerce’s Bureau of Industry and Security.

On January 13, the US government announced the launch of new regulations on AI chips, aiming to impose strict global export restrictions these chips. TSMC’s latest move went further to apply more compliance restrictions on Mainland China companies on chips beyond AI GPUs and beyond cutting-edge technologies like 3nm or 7nm processes. The 16nm mature processes are impacted by this new restriction too.

Source: UDN, February 8, 2025
https://udn.com/news/story/7240/8534584

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Many Foreign Accounts on Rednote Are Fake

Due to the U.S. ban on TikTok, a surge of foreign users has recently appeared on Rednote, another Chinese social media platform. Media reports suggest that e-commerce Multi-Channel Network (MCN) companies are mass-producing “fake foreigners,” creating fraudulent accounts en masse.

These companies’ core strategy involves closely monitoring trending posts on the platform, extracting keywords and content structures, and then mass-producing similar content. Each of their employees manages multiple accounts, generating over a dozen posts per day, handling everything from image editing to content rewriting and posting.

On Rednote, “foreigners” can easily gain thousands or even tens of thousands of followers with just a single post. Thus, many domestic Chinese MCN companies have started mass-registering “fake foreigner” accounts with Western names and profile pictures featuring Westerners’ faces. These accounts often post content stolen from real overseas users.

Users have noticed that some so-called “foreign bloggers” post English content with grammatical errors, yet their Chinese is as fluent as that of a native speaker. Some of their profile pictures also appear unnatural, with mismatched skin tones. Others blatantly repost content from foreign influencers without even removing the original watermark. Some investigations on Rednote have found that many posts – from accounts with different usernames and featuring different individuals – use identical caption templates, sometimes even failing to change the names in their self-introductions.

Source: Epoch Times, January 26, 2025
https://www.epochtimes.com/gb/25/1/26/n14422251.htm

Briefings | | |   Information/Technology US-China Relations