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Virus Causes Chaos at iPhone Chip Maker TSMC Factories

Full recovery is expected today after the virus prevented TSMC equipment from functioning.

By CBR Staff Writer

iPhone components supplier Taiwan Semiconductor Manufacturing Co (TSMC) expects to resume full operation today after a computer virus debilitated factories across Taiwan.

On Friday, TSMC said in an advisory that a computer virus “outbreak” occurred on August 3, which not only impacted computer systems in the firm’s factories but also spread to fabrication equipment.

The computing problem was severe as TSMC’s tools were disrupted, bringing with it operational chaos as a consequence.

As of the time of writing, roughly 80 percent of systems which were compromised have been brought back online. A full recovery is expected today.

TSMC has not blamed the malware on a cyberattack, but rather, says the virus was able to spread due to fumbled software installation connected to a new tool.

Once the tool was connected to the firm’s network, this “caused a virus to spread.”

The rate of infection ranged in severity depending on the affected fabrication equipment, but no further details have been disclosed.

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TSMC added that it “contained the problem and found a solution.”

However, the manufacturing giant, a producer of components for Apple’s iPhone product family, has warned that the incident will cause “shipment delays and additional costs.”

Taipei City Capital of Taiwan

Hitting the Bottom Line

TSMC estimates that the days lost to the virus will result in a three percent impact to Q3 revenue and the impact to gross margin is expected to be approximately one percent.

Shipments delayed in the third quarter will be recovered by the fourth quarter and the firm intends to work with customers to communicate how wafer orders will be processed.

The Taiwanese manufacturer has not specified which customers may experience delays.

However, according to data compiled by Bloomberg, Apple accounts for over 21 percent of TSMC’s revenue and the virus outbreak has occurred before the iPad and iPhone maker is rumoured to announce vast price cuts to its smartphone range, as well as potentially reveal the iPhone X Plus.

Sanford C. Bernstein analyst Mark Li told Bloomberg that despite the disruption, TSMC shipment delays are likely to be “very limited” as the company can catch up over the holiday season.

The majority of customers have been notified and TSMC says that no confidential or sensitive data was compromised during the incident.

The company has also taken additional steps to improve security measures and prevent a recurrence.

At the time of writing, TSMC shares have fallen by 0.74% in Taiwan.

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