The Taiwanese company responsible for making the chips that power the Apple iPhone, as well as other popular devices, was the victim of the debilitating WannaCry computer virus. The attack so significantly impacted the operation of Taiwan Semiconductor Manufacturing Co.’s (TSMC) factories that is expected to delay global shipment and reduce the company’s revenues. The company says that the attack happened at the worst possible time, just as its operations were ramping up in response to the release of Apple’s next model iPhone.
The company revealed that the WannaCry virus outbreak occurred on a Friday, and though they were able to restore 80 percent of the fabrication tools by the following Sunday morning and expected full recovery by the beginning of the following week. Still, despite the quick turnaround they announced that shipments would be delayed and that they calculated the attack would lead to a three percent decline in third quarter revenue and one percentage drop in operating margins.
Though the company’s quick recovery means their predicted profit margin is not expected to change for the year as a whole, the attack serves as a stark reminder of how vulnerable the world’s supply chain is to attacks by cybercriminals, and how an attack on one company can not only affect its operations, but the operations of all those that depend upon them for the supplies that they produce. TSMC reports that there was no confidential information compromised by the attack and that it has taken steps to strengthen its internal security measures as a result of the attack, which they blame on a “misoperation” when a new tool’s software installation process was initiated: operators failed to scan the tool’s software for malware before it was installed. Once the virus had infected the new tool and it was connected to the company’s computer network, it quickly spread to every other tool in the factory.
This type of cybercrime is becoming more and more prevalent, and is expected to cost global business up to $8 trillion in damage over the next five years. TSMC’s Chief Financial Officer, Lora Ho, said, “TSMC has been attacked by viruses before, but this is the first time a virus attack has affected our production lines.”
The attack is directly linked to the 2017 WannaCry cyberattacks, which brought many companies to a standstill as they searched for a fix for the ransomware attack. Though TSMC may not be a household name, it is the world’s largest chipmaker, and its role in production for Apple and other companies makes it clear that in the digital age, bad actors can have an enormous impact with a small action.
The ever-present risk of cybercrime means that businesses must be proactive in their approach to protecting themselves. Cyber risk insurance coverage can protect against the costs, expenses and liabilities of restoring or recreating data, the costs you can incur when an outsourcer is attacked, business interruption, and more. Call us to talk about how we can protect your business today.