Apple Faces Chip Delays Due to Supplier Computer Virus

A major chip supplier for Apple, Taiwan Semiconductor Manufacturing Co., has faced a computer virus outbreak due to which shipments could be delayed, the company said.

The problem occurred on Friday and was disclosed a day later. A number of computer systems and so-called fab tools, needed in the chip-making process, were affected, which the manufacturer warned could result in delayed product shipments.

TSMC added that the issue could also result in hit revenues as it would reduce third-quarter revenue by 3 percent, or $255 million, from its previous guidance.

The company said on Sunday that 80 percent of its affected tools have, however, been recovered and that the problems would be resolved within a day. It also noted that the majority of its customers have been notified.

Apple, which uses the chips in their iPhone Xs, is one of TSMC’s biggest customers. The Taiwan company is currently making the next-generation A12 processor expected to be in the U.S. technology giant’s upcoming smartphones rumored to be released later this year.

So far, analysts haven’t seen a significant impact on iPhone production, but some forecasts indicate that about 1.5 million to 1.7 million A12 chips could be delayed due to the virus outbreak.

“Since TSMC indicated the delayed shipment from this incident will be recovered in the following quarter, we think there will be no meaningful impact on Apple’s new coming iPhone,” Fubon Research said in a note on Monday.

Other analysts point out that Apple won’t suffer a major impact to its products as the supply chain “usually prepares for these incidents and manufactures surplus chipsets during the initial ramp-up stage.”

The Taiwan Semiconductor manufacturer said that the virus outbreak didn’t result in confidential information being compromised. There were also no indications that this was a cyber attack and the company said that “misoperation” during the software installation process caused the issue.

However, analysts demanded that TSMC provide further information on what happened “to alleviate the security concerns of customers and long-term investors”, adding that “misoperation” was not good enough an explanation.

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