WannaCry ransomware hits Apple’s chip maker: several plants closed

Taiwanese TSMC chip making company hit by WannaCry ransomware

TSMC, one of the biggest chip manufacturers in the world is hit by a variant of WannaCry ransomware

Taiwan-based semiconductor foundry was forced to shut down its operations on several plants after Friday's virus attack. It turned out that the company was hit by the variant of the infamous WannaCry^[1] ransomware which caused havoc in multiple high-profile organizations and governmental institutions back in 2017.^[2]

The cyber threat managed to get into one of the networked computers when one of the suppliers connected a compromised software without performing a virus scan. The infection quickly spread to several plants in Tainan, Hsinchu, and Taichung. Fortunately, no confidential information was compromised.

By 5th of August, the company redeemed 80% of its operation and promised to be fully functional by the 6th of August. Nevertheless, TSMC reported^[3] about three percent loss in revenue for the current quarter. Additionally, shipment delays and additional costs are to be expected as well:

TSMC expects this incident to cause shipment delays and additional costs. We estimate the impact to third quarter revenue to be about three percent, and impact to gross margin to be about one percentage point. 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 U.S. dollars given on July 19, 2018.

TSMC most likely to prioritize Apple

Taiwan Semiconductor Manufacturing Company Ltd., which is considered to be one of the most advanced and most significant chip sites in the world, is a supplier to most influential electronics supplies such as Nvidia, Qualcomm, AMD, and Apple, grossing at US$29.3 billion in revenue in 2016.

TSMC currently produces A11 processors for iPhone X it was the only chip supplier for Apple devices since 2016. Three new iPhone models, as well as Apple Watch and iPad models, are planned to be released this fall, making it the most significant financial quarter for Apple. Thus, It is speculated that the company will prioritize Apple when it comes to chip production and timely delivery.

According to analysts, 1.5 million to 1.7 million A12 chips^[4] will be late for timely delivery. However, researchers believe that it will be delayed by just a few days.^[5] Besides, TSMC reported that it predicts to produce 83 million iPhone chips in the next year quarter.

The infection spread after compromised software was injected into company's computer network

The malware was introduced to TSMC's network during the installation of the compromised software. The virus spread to thousands of production machines, stopping the operation of several plants entirely.

According to Chef Executive officer C.C. Wei of TSMC, the malware attack was not a “hack or a kidnap,” as no ransom was demanded. Nevertheless, the company had to change several procedures due to the encounter with a virus that is more complicated than initially thought.

Device chips carry major ramifications when it comes to national security. Therefore, researchers believe that TSMC, one of the largest semiconductor manufacturer, might be a target of hackers who want to steal technical information.

While the impact on TSMC customers might be minimal due to WannaCry attack, it is still surprising how malware managed to make it past security protocols of one of the most superior and technologically advanced companies in the world.