TSMC says a number of fab tools infected by computer virus

Judy Cobb
August 6, 2018

Contract chipmaker TSMC has fallen victim to a computer virus outbreak after trying to install a new tool in its manufacturing operations.

The company is still cleaning the malware off its equipment, but expects to be finished by tomorrow. Apple designs the processors that go into its devices, but it uses TSMC as its exclusive partner for producing the chips. It is likely that the incident might cause a delay in the shipment of the rumoured three iPhones which the Cupertino-based company is likely to launch in fall this year. But it sees no long-term difficulties.

TSMC said the incident is expected to impact 3% of its third-quarter revenues, and delayed shipments in the third quarter will be recovered in the fourth quarter. TSMC has said that the virus affected several of its fabrication tools though the problem has been contained. The Company is confident shipments delayed in third quarter will be recovered in the fourth quarter 2018, and maintains its forecast of high single-digit revenue growth for 2018 in USA dollars given on July 19, 2018.

Shares in TSMC in Taipei were down 1% in late morning trading on Monday. TSMC says no confidential information was compromised in the virus attack and most customers have been notified.

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Some delays stemmed from launch vehicles, such as SpaceX's September 2016 launchpad explosion of an uncrewed Falcon 9 rocket. The launches will mark the first manned flights to take off from US soil since the space shuttle program was retired in 2011.

The implications are also unclear for Apple. Currently, we don't know what impact, if any, this virus will have on the production of the new iPhone or on TSMC in general.

A bellwether for the chip industry as well as an early indicator of iPhone demand, TSMC heads into its busiest quarters grappling with waning enthusiasm for the high-powered chips used to mine digital currencies.

The semiconductor company blames the outbreak on a mistake during installation of software for a new tool, which was then connected to its computer network.

"TSMC has been attacked by viruses before, but this is the first time a virus attack has affected our production lines", the company's chief financial officer, Lora Ho, told Bloomberg.

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