iPhone chip maker hit by malware

Taiwan Semiconductor Manufacturing Co (TSMC) blamed a variant of the WannaCry ransomware for the unprecedented shutdown of several plants, as it ramps up chipmaking for Apple’s next iPhones.

Full operations have resumed and the malware will reduce revenue this quarter by no more than 2%, down from an initial estimate of roughly 3%, said chief executive CC Wei.

The company faces shipment delays from the infection, which happened when a supplier installed tainted software without a virus scan.

It spread swiftly and hit facilities in Tainan, Hsinchu, and Taichung — home to some of the cutting-edge plants that produce Apple’s semiconductors.

TSMC intends to make up for the lost time as it heads into the critical holiday season, Apple’s most important quarter.

But Mr Wei wouldn’t discuss the impact on its customers or where the malware variant may have originated, nor how it made it past the company’s security protocols — a black eye for a corporation that prides itself on its technological and operational superiority.

No hacker targeted TSMC, Mr Wei said, explaining that the infected production tool was provided by an unidentified vendor.

“We are surprised and shocked,” he told reporters.

We have installed tens of thousands of tools before, and this is the first time this happened, he said.

The company is overhauling its procedures after encountering a virus more complex than initially thought, he said.

Chief financial officer Lora Ho said the incident would have some impact on TSMC’s 2018 profit, declining to elaborate beyond an earlier warning that third-quarter gross margins would slip by about a percentage point.

The incident underscores the global nature of the technology supply chain, in which companies like Apple and Qualcomm depend on hundreds of suppliers around the world.

WannaCry spread across the globe in May 2017, rolling through corporations from FedEx to French carmaker Renault and infiltrating Russia’s interior ministry as well as British hospitals.