Big iPhone Parts Maker Hit By Virus Critical Delay

Computer chip in circuit board

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"The Company is confident shipments delayed in third quarter will be recovered in the fourth quarter 2018".

A computer virus outbreak at Taiwan Semiconductor Manufacturing Co Ltd (TSMC) could delay chip shipments for Apple Inc's new iPhones but the impact will be limited as TSMC has prepared itself for such disruptions, analysts said.

The sole maker of the iPhone's main processor said a number of its fabrication tools had been infected, and while it had contained the problem and resumed some production, several of its factories would not restart until at least Sunday. As of 2:00 p.m., about 80% of the company's impacted tools had been back to normal, the company said, adding that it expected full recovery on August 6. "We estimate the impact to third quarter revenue to be about three percent, and impact to gross margin to be about one percentage point", it said. It is 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.

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"Data integrity and confidential information were not compromised".

"Long-term, TSMC's trustworthy image is somewhat tainted but it is hard to quantify the effect now", Li wrote in a research note Monday. No individual or organization has taken credit for the attack though TSMC representatives have said that the virus was not introduced by a hacker.

Aside from this issue, both Apple and TSMC are having a good year, with Apple boasting a market value in excess of $1 trillion.

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TSMC has grown to become the largest independent semiconductor foundry in the world, with profits previous year of $11.6 billion. TSMC attributed the outbreak to a some sort of misoperation when installing software for a new tool, though the company did not go into specifics.

"TSMC has been attacked by viruses before, but this is the first time a virus attack has affected our production lines", Chief Financial Officer Lora Ho told Bloomberg News by phone.

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