IPhone chipmaker hit by major virus

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(TSMC) is recovering from a major internal computer virus outbreak that ravaged its systems, forcing the chipmaker to shut down several factories.

The company is still cleaning the malware off its equipment, but expects to be finished by tomorrow.

This was no minor problem.

The incident marked the most severe disruption in the company's ongoing efforts to ramp up chipmaking for iPhones. But it sees no long-term difficulties.

The degree of infection varied by fab. TSMC said it found a solution and has now contained the virus, and has also restored 80 percent of the company's affected tools.

Over the weekend the Company disclosed that a computer virus was affecting part of its production and that it is expected to impact 3% of its third-quarter 2018 revenues. We estimate the impact to third-quarter revenue to be about three percent, and impact to gross margin to be about one percentage point.

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Most of TSMC's customers have been notified of this event, and the Company is working closely with customers on their wafer delivery schedule. August is a big month for manufacturing as we're leading into the holiday season and consumer devices are being made now, but you can't make those new expensive products without chips made by TSMC if you're one of their customers.

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

The incident comes weeks after TSMC cheered investors with a rosy outlook for smartphone demand in the latter half of the year. Chief executive officer CC Wei had said sales would rise this year by a high single-digit percentage in United States dollar terms, down from an already reduced projection of about 10%.

According to Bloomberg, the virus originated from a mistake made during software installation that then spread throughout TSMC's network.

"TSMC has been attacked by viruses before, but this is the first time a virus attack has affected our production lines", Ho told Bloomberg News on Saturday.

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