- Apple supplier TSMC was hit by a virus over the weekend.
- The virus was a version of WannaCry, TSMC said in a statement.
- TSMC makes the processors that are currently used in the iPhone X and iPhone 8 to Apple’s specifications.
- The incident could delay shipments of TSMC-made chips, the chipmaker said in a statement, but it expects all delays in the 3rd quarter to be made up in the 4th quarter.
TSMC, the largest chip contract manufacturer in the world, was hit by a virus attack that shut down some of its operations over the weekend.
The virus was a version of WannaCry, a ransomware attack that targeted computers running Microsoft Windows 7, that usually threatened to encrypt and delete files unless the attackers were paid in Bitcoin. However, the software was not capable of encrypting the victim’s computer, according to a TSMC spokesperson, unlike earlier versions of the virus.
WannaCry was developed by North Korea, according to the US government.
It got into the TSMC plant when it was installing a new software tool, which was not first scanned for viruses before connecting to the network, according to a TSMC statement.
“This virus infected fab tools and automated materials handling systems, as well as related computer systems, which used Windows 7 without patched software for their tool automation interface,” TSMC said in a statement. “It caused affected tools to become inoperable and rendered certain automated materials handling systems unable to function normally.”
TSMC said that its primary computer systems including production information and customer information – the plans for the next iPhone chip, for example – were not affected by the virus outbreak.
Although TSMC isn’t a household name, there’s a good chance that you may be reading this story on a device that uses a processor the Taiwan company manufactured.
TSMC is one of Apple’s key partners to build its chips. Apple designs its A-series processors, the chips used in the iPhone and iPad, and TSMC actually makes what Apple came up with. Apple has other processor fabrication suppliers but TSMC does the majority of the work at the moment, and manufactures all of the current generation A11 chips, which are found in the iPhone 8 and iPhone X.
Although TSMC does a lot of work for Apple, it also fabricates chips for lots of other companies too, “most of” whom have been notified. It said on Sunday that it would delay shipments of chips to some customers, which would decrease third quarter revenue by 2%.
From TSMC’s latest statement:
TSMC expects this virus outbreak event to cause wafer shipment delays in the third quarter, impacting no more than two percent of third quarter revenues. This event will also impact third quarter gross margin by approximately one percentage point. The Company is confident shipments delayed in third quarter will be completely recovered in fourth quarter 2018, and therefore maintains its forecast of high single- digit revenue growth for 2018 given on July 19, 2018.
The hack underscores how Apple’s suppliers have become targets themselves. In an SEC filing last year, it listed confidential information leaking from its suppliers as a risk factor facing the company.