TSMC production disrupted by outbreak of WannaCry virus following botched software upgrades

WannaCry unleashed on Windows 7 workstations running critical systems, TSMC reveals today

Production at contract foundry TSMC was disrupted over the weekend due to an outbreak of the WannaCry virus on unpatched Windows 7 machines running critical systems, the company has revealed today.

The outbreak caused a stoppage in production across many of the company's lines, which will cause some delays to shipments and will have a negative impact on its third-quarter results.

TSMC is manufacturing the microprocessors in the next iPhone, which is expected to be launched next month, but analysts don't expect production of that - or any of Apple's other forthcoming new devices - to be affected.

The company claims that it will make good its production losses in the fourth quarter. As such, production of AMD's forthcoming 7nm CPUs, in which production will be split between GlobalFoundries and TSMC, should not be affected either.

In a statement, the company said: "The degree of infection varied by fab. TSMC contained the problem and found a solution. As of 14:00 Taiwan time [on Sunday], about 80 per cent of the company's impacted tools have been recovered, and the company expects full recovery on 6 August.

"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… Most of TSMC's customers have been notified of this event, and the company is working closely with customers on their wafer delivery schedule."

It's not entirely clear how the virus was able to penetrate the company's systems, with TSMC's own explanation not being entirely clear.

The statement concluded: "This virus outbreak occurred due to mis-operation during the software installation process for a new tool, which caused a virus to spread once the tool was connected to the Company's computer network.

"Data integrity and confidential information was not compromised. TSMC has taken actions to close this security gap and further strengthen security measures."

TSMC has been the target of alleged industrial espionage from well-funded semiconductor companies in China for more than a decade.