Over the weekend, the Asian manufacturer that processes chips for iPhone and other top-notch companies’ devices was disrupted by a computer virus. On Sunday, the Taiwan Semiconductor Manufacturing Company said that a number of their computer systems were on Friday evening attacked by a virus at its facilities in the mother country. The incident will likely cause delays in shipments and incur additional costs as well as a reduction of up to 3 per cent in revenue and a decline in gross margins of up to 1 per cent in the third quarter.
TSMC however remained optimistic that it could make up for lost production during the fourth quarter of the last fiscal year and meet its high single-digit revenue forecast in growth for the year. With 80 percent of the company’s computers and tools recovered from the effects of the bad software, TMSC expected full recovery by Monday. The outbreak ensued due to an operational hitch when a new software tool was in the process of installation. The virus spread through the company’s network when the tool was connected but according to the company, confidential information and data integrity were not exposed to the malware.
TSMC has been processing Apple’s A12 chip for its next generations of iPhones having been producing the A11 processor used in iPhone X. The A12 chips are expected to start rolling out next month but uncertainty remains after the bump in the company’s production schedule. Kevin Krewell, the principal analyst at the Tirias Research, a research and analysis advisory firm based in Arizona, said that it is unlikely that the transient issue would hamper long-term production. Kevin said that, since TSMC hasn’t provided any information showing effects on the production line, it is difficult to be certain because of the delays in the availability of iPhone.
American manufacturing companies are aware of the risks of making their products overseas. However, the benefits so far out way the risks and a few hitches in the supply chain are not likely to cause a change of heart. Bringing manufacturing back into America is a drastic and expensive endeavour that is currently off the table. Jack E. Gold, the principal analyst at J. Gold Associates says that Apple may want to manufacture in the US but they would still have to acquire some parts from China. Unless the problems in TSMC are recurrent, Jack says that he expects that Apple and other manufacturers will continue to deal with overseas manufacturers.