Chipmaker hit by virus outbreak before iPhone premiere

Avatar By Le Williams | 2 years ago

Foundry giant Taiwan Semiconductor Manufacturing Company (TSMC) said a computer virus outbreak that hit the company on August 3rd will reduce its third-quarter revenue by approximately 3%.

The virus, which TSMC said was accidentally spread by misoperation during the software installation process for a new tool, affected a number of the company’s computer systems and fab tools in Taiwan.

The company said Sunday that about 80% of the impacted tools had been recovered and that a full recovery is expected Monday.

TSMC (Hsinchu, Taiwan) said it expects the incident to cause shipment delays and additional costs that will not only hurt its third-quarter revenue, also reduce its third-quarter gross margin by about 1%. TSMC said it is confident shipments delayed in the third quarter will be recovered in the fourth quarter and maintains its forecast of high single-digit revenue growth for 2018 issued last month.

The incident emphasizes the global nature of the technology industry’s supply chain, in which companies like Apple and Qualcomm depend on hundreds of suppliers around the world.

Notably, this exists as the first time a virus had ever brought down a TSMC facility, recalling the WannaCry cyberattacks of 2017 that forced corporations around the world to suspend operations as they rooted out the ransomware.

TSMC confirms no confidential information was compromised in the virus attack and most customers have been notified.

“TSMC has taken actions to close this security gap and further strengthen security measures,” TSMC Chief Financial Officer Lora Ho said to Bloomberg by phone on Sunday.

Most of TSMC’s customers have been notified of this event, the company said.