ibusinesslines.com
ibusinesslines.com August 20, 2018


Virus briefly halts production at iPhone chip-maker TSMC

06 August 2018, 03:26 | Jodi Jackson

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Computer chip in circuit board

The computer virus outbreak at Taiwan Semiconductor Manufacturing Company (TSMC) has raised concerns about its impact on the foundry house's shipments particularly its 7nm chip output during the third quarter, a traditionally peak season for the contract chipmaker's clients such as Apple. (TSMC) is recovering from a major internal computer virus outbreak that ravaged its systems, forcing the chipmaker to shut down several factories. The Taiwanese company said the incident, which comes as it ramps up chipmaking for Apple Inc.'s next iPhones, would delay shipments, without specifying which customers would be affected. TSMC has said that the virus affected several of its fabrication tools though the problem has been contained.

No confidential information was compromised, the company said.

The chip manufacturer didn't specify what it was producing when this problem occurred, but given the timing it was nearly certainly the Apple A12.

It is not thought yet that the attack will delay the much-expected iPhone 9, thought to be under construction now before an expected reveal in September, but the news came as TSMC ups production in anticipation of the launch from its biggest customer. We estimate the impact to third-quarter revenue to be about three percent, and impact to gross margin to be about one percentage point.


Apple did not immediately respond to a Reuters request for comment.

"TSMC has been attacked by viruses before, but this is the first time a virus attack has affected our production lines", the company is quoted as saying.

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.

TSMC has said it maintained its previous forecast of high single-digit revenue growth for 2018 as shipments delayed in the third quarter would recover in the fourth quarter. Chief executive officer CC Wei had said sales would rise this year by a high single-digit percentage in U.S. dollar terms, down from an already reduced projection of about 10%.



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