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iPhone Chip Supplier TSMC Forced To Shut Down Factories Due To Computer Virus

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TSMC, Apple's sole supplier for the main processor of iPhones, was forced to shut down several factories due to a computer virus. How will this affect the upcoming 2018 iPhone models?  ( Apple )

Taiwan Semiconductor Manufacturing Co. or TSMC was forced to shut down several factories due to a computer virus in the middle of the ramp-up for chips to be used on Apple's next iPhones.

TSMC suffered one of the most severe disruptions that it has ever faced. Will this have a significant effect the supply of iPhone chips?

TSMC Factories Shut Down Due To Computer Virus

TSMC is Apple's sole supplier for the main processor of iPhones, so a computer virus shutting down several of its plants is a big deal.

According to TSMC, a number of its fabrication tools were infected by the virus. It has since contained the situation and restarted production in some factories, though other factories will need a few more days before the resume operations.

TSMC said that the virus was not released into the factories by a hacker. It remains unclear how it infected the plants and who was responsible for it.

Speculations, however, suggest that the source of the attack is from China, as its political rift with Taiwan continues. Also, it is possible that someone within the company accidentally downloaded a malware, which then spread throughout the TSMC network.

The Apple iPhone chip supplier is now working on solutions to completely eliminate the virus, but the degree of infection in each factory varies.

"TSMC has been attacked by viruses before, but this is the first time a virus attack has affected our production lines," said CFO Lora Ho to Bloomberg.

Ho did not reveal how the shutdowns will affect TSMC's revenue. She did not confirm either if the affected facilities were involved in making iPhone chips.

How Will TSMC Factories Shutdown Affect Apple?

TSMC is the biggest semiconductor manufacturer in the world, and also serves as a supplier to ADM, Nvidia, and Qualcomm.

All eyes, however, are on the company's supply of iPhone chips to Apple. In May, TSMC started manufacturing Apple's A12 chip, which is widely expected to power the upcoming 2018 iPhone models. The chips are the first to use a new 7nm process, which should make them smaller, faster, and more efficient.

The implication of the TSMC factories shutdown remains unclear for Apple that recently became the first company to reach a market value of $1 trillion largely due to iPhone sales. It is yet unknown whether the computer virus affected the manufacturing of the chips for the new iPhones, and if it would result in a delayed release for the devices.

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