Software Developers Beware of IT Risks from Semiconductors
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TEXT: Advancing Semiconductors: Information Technology
EMPOWERING THE MIRACULOUS
EMPOWERING THE EXTRAORDINARY
EMPOWERING THE LIFESAVING
EMPOWERING THE AMAZING
EMPOWERING THE INNOVATIVE
EMPOWERING THE WORLD OF TOMORROW
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JEN: Semiconductor advancements enable software developers, cloud computing companies, data centers and more to shape a brighter digital future.
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TEXT: Jen Klein, IT Industry Lead, Travelers
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I'm Jen Klein, IT Industry Lead for Travelers.
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TEXT: IMPROVING THE POTENTIAL OF INFORMATION
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Developments in semiconductor technology enable
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TEXT: Semiconductor development enable: increased data processing, improved memory and enhanced energy efficiency.
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increased data processing, improved memory and enhanced energy efficiency. As with many tech advancements, these possibilities can also lead to devastating risks for those who are not prepared.
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TEXT: THE CHALLENGES OF NEW CAPABILITIES AND INNOVATION
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For example, a software as a service company develops AI applications for customer payroll and HR data. These applications rely on state-of-the-art semiconductors produced by a handful of overseas manufacturers. With applications so sophisticated, yet so new and running on the latest hardware, the company may face accelerating and unanticipated cyber risks. The semiconductors they rely on
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TEXT: Unproven semiconductors could have unidentified vulnerabilities
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could contain vulnerabilities not identified by their hardware vendors, exposing the company to the risk of cyberattacks. And as enterprise users take advantage of these new applications, the number of devices accessing them proliferates, providing more opportunities for cybercriminals to strike. Lastly, and perhaps scariest of all,
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TEXT: Criminals may use AI to target sensitive personal data
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if the software as a service company handles sensitive personal data, they may be targeted by criminals armed with new tools powered by AI, which can challenge even the most robust cybersecurity protocols.
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Travelers has been ensuring software and IT companies for more than 40 years, and our range of capabilities helps manage these risks.
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TEXT: We provide access to pre- and post-breach services
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We also help provide access to pre- and post-breach services that may prevent and respond to cyberattacks. Plus, we offer cyber coverage specifically designed
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TEXT: Cyber coverage specifically for technology companies
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for technology companies, helping to protect them from social engineering fraud, cyber extortion and more. Travelers is a key part of empowering the breakthroughs of tomorrow.
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TEXT: To learn more about how we're empowering the tech & life sciences industry, visit travelers.com/semiconductors Travelers Indemnity Company and its property casualty affiliates. One Tower Square, Hartford, CT 06183.
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The world of software development thrives on pushing boundaries, constantly evolving to leverage the latest semiconductor capabilities into increasingly powerful software. However, the semiconductor manufacturing ecosystem is vulnerable to risks threatening to disrupt it. The explosive growth in demand for AI-ready semiconductors pressures the supply chain that hardware manufacturers depend on. This, in turn, can impact software businesses.
"To help mitigate semiconductor risks, software and IT company risk managers need to prepare for the threats of semiconductor supply chain disruptions and cyberattacks targeting semiconductor hardware," said Jennifer Klein, Software and IT Lead at Travelers Technology & Life Sciences.
Bottlenecked software research & development
Reliance on specific hardware or dependencies on manufacturers for cutting-edge testing can leave software companies vulnerable to unexpected semiconductor supply chain disruptions and delays.
Imagine a software company is crafting the next generation of image recognition software, but the powerful graphic processing units they need to test it are not available because of a sudden disruption in the supply of a special semiconductor. Development grinds to a halt, innovation stalls and the business’s competitive edge starts to fade. That’s the nightmare scenario of bottlenecked research and development, according to Klein.
“Sophisticated software is important, but without hardware such as the latest semiconductors, you may not be able to deliver on schedule, creating increased risk to your company,” she said.
Mitigation
Diversify and fortify your supply chain. Secure alternative hardware sources and build strong contingency plans into your delivery schedules.
Coverage
Consider Technology E&O insurance coverage to protect your company from legal liabilities arising from delivery problems. Missing chips can spell disaster for crucial software deliveries. When hardware delays derail software development projects, contractual obligations may fall by the wayside, potentially leading to technology errors and omissions (E&O) claims.
“Late delivery may be a contract failure leaving software developers facing legal and financial consequences,” said Klein.
Hidden cybersecurity vulnerabilities in hardware
With intricate applications running on complex hardware and semiconductors, software can be vulnerable to cybersecurity threats hidden in the silicon semiconductor chip itself. The increased complexity in the hardware can introduce new attack vectors creating new access points for cyber harm. Likewise, lack of precision in the coordination of the hardware and software can create security gaps.
Mitigation
Prioritize supply chain transparency and understand your semiconductor and hardware providers’ physical security practices. Proactively conduct software audits, change default access credentials on hardware, stay vigilant for updates and ensure timely implementation.
Coverage
Consider CyberRisk Tech insurance from Travelers with enterprise-wide Technology Errors and Omissions Liability coverage for additional protection.
Diversifying hardware options, building strong supplier relationships and adopting strong cybersecurity practices are all vital steps in strengthening your software development pipeline and shielding your business from semiconductor risks.
“Navigating risks from unexpected sources like semiconductors requires proactive measures. Don’t let the shadow of semiconductor risk dim your software development future,” said Klein.
Learn more about software and IT insurance from Travelers or reach out to a Travelers representative.
