The hottest TSMC was suddenly blackmailed, and the

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TSMC was suddenly blackmailed and expected to lose us $170million in the third quarter

the more sophisticated the wafer manufacturing process, the slower the resumption of production will be

when consumers are waiting for Apple's latest products, an incident of the upstream wafer manufacturer Taiwan integrated circuit manufacturing Co., Ltd. (TSMC) may affect the product launch process

On the evening of August 3, Taiwan media revealed that TSMC was suddenly infected by a computer virus. It is said that the infected factories include machines in the main Fab factories such as Zhuke Fab 12, Zhongke Fab 15 and Nanke Fab 14. On the 5th, TSMC announced that it had controlled the scope of infection

in the afternoon of August 6, TSMC held a press conference. Wei Zhejia, the president, attended and repeatedly stressed that according to internal verification, the virus attack did not come from a ghost or a targeted attack by external hackers. It's just a human error in the process of installing software on the new machine, and the virus penetration speed is very fast due to the connection between plant areas

Wei Zhejia said that as of the 6th, all the machines of TSMC have resumed production, and it is expected to catch up with all the production progress in the fourth quarter of this year. Therefore, the outlook for the annual performance is expected to remain unchanged

an industry insider analyzed the 21st Century Business Herald. It is obvious that TSMC provides the most advanced manufacturing process. Once there is a supply problem, all customers may be affected. In my experience, the shutdown of three plant areas for days will bring heavy losses. Under normal circumstances, water and power cuts can be tolerated for up to 24 hours. The details of the daily loss cannot be evaluated, but the loss is bound to be large

according to TSMC's previous outlook, the net operating income in the third quarter of this year is expected to be 84 US $500million, with an operating gross margin of 48% - 50%. If the gross profit margin is not more than 2%, TSMC's revenue in the third quarter will decline by about 1 US $7.1 billion

the impact on revenue mainly lies in the cost

at the beginning of the press conference on the afternoon of August 6, Wei Zhe announced the progress of relevant inspections of the company. It is said that TSMC was infected by the virus this time, and its significant competitive advantage was that the new machine made mistakes in the process of installing software. On August 3, when TSMC installed the new machine, it did not isolate the computer before connecting the network to ensure that the computer was free of virus infection, resulting in human error, which caused the computer with virus to directly enter the company's network

although it did not disclose the specific affected production lines, products and the list of relevant customers, it did not explain which factory was the first to infect the virus. However, Wei Zhejia admitted that it was Zhuke, Zhongke and Nanke plants that were infected, and explained that our production system was all connected, which was the strength of TSMC. The interconnection between wafer factories enables us to have higher efficiency. Therefore, once infected by the virus, it will directly infect the north, middle and South plant areas

for this incident, Wei Zhejia lamented that the virus is much more complex than we thought, and spreads quickly. The more advanced our plant is, the higher the degree of automation is, and the more complex the system is, so it will be greatly affected. At this point, he once again stressed that TSMC is very sure that it will catch up with the fallen progress in the fourth quarter, which will not affect the annual performance. We will try to minimize the impact on customers

taking this as an example, TSMC said it would add a protective measure in terms of virus prevention

according to reports, before TSMC installed the new machine, the staff manually checked the virus for the computer, and then set a checkpoint on the basis of manual operation, which is called the anti stupidity measure. That is, it is set in the system that if the virus is not prevented and filtered by the machine, the new machine will not be connected to the servo hydraulic press. We find that human beings cannot never make mistakes. This new mechanism will be launched soon. In the future, the system will automatically detect it and try to eliminate the influence of human factors. Wei Zhejia said

at the same time, we are aware of the spreading impact of the interconnection between the factories this time, and TSMC will also set up a firewall mechanism between the factories

TSMC inspection found that the infected virus is a variant of wanna cry, and the direct impact is that the infected computer goes down or restarts. However, the company has repeatedly stated that it has ensured that the production database and customer data are not affected by the virus. Wei Zhejia explained that after the virus infection incident, TSMC immediately shut down the affected computers and automatic handling systems and installed correction software at full speed

as the wanna cry virus was also accompanied by extortion during its previous rampage, Wei Zhejia explained that the virus spread very fast, but fortunately it did not have the ability to encrypt

the company has stated in its announcement on the 5th that as of 2 p.m. Taiwan time, about 80% of the affected machines of the company have returned to normal. At the press conference on the 6th, Wei Zhejia also said that the company was very cautious in the verification of the virus. In fact, TSMC was fully ready to resume production on the 5th, but in order to avoid haste, it still waited until the 6th to fully resume production

however, the recovery process is not so easy. It is reported that the more precise the wafer manufacturing process is, the slower the progress of resuming production will cause the test results to be inaccurate. Although the management did not disclose the specific number of scrap wafers affected by the attack, it can also be seen from the financial impact announced by the company

it is expected that this event will delay the shipment of wafers in the third quarter. Different from the previous estimate of 3%, the company estimates that the impact on the third quarter revenue will not exceed 2%, which will lead to a decrease of 1 percentage point in the third quarter gross profit

according to the analysis of Ho Limei, the chief financial officer of TSMC, a large part of the company's estimated revenue changes in the third quarter came from the increase in costs, including scrapped wafers, and the increase in the use of raw materials than estimated. It will have an impact on this year's profits, but we hope that through our efforts, we can try to reduce it in various ways later

in addition, the company has increased its investment in capital security, but compared with the cost of wafer production and manufacturing, the management said that this is only a small part

the short-term impact on the wafer delivery process

the virus attack on TSMC and the affected production lines are repeatedly mentioned by the on-site media because the affected factories are the factories that the company mainly produces 12 wafer production lines and 7-nanometer process, carrying the links that more advanced electronic products rely on

this includes apple. Previously, media reports said that TSMC is expected to exclusively win the order of Apple A12 chip through the 7-nanometer process. It is reported that TSMC is trying to increase the chip production capacity of 7 nm to meet the order demand of the new generation of iPhone models in 2018, and even does not rule out the possibility of involvement in the production of MacBook processors

Lin Jianhong, research manager of Jibang consulting Tuopu Industrial Research Institute, analyzed to the 21st Century Business Herald that in terms of global 12 inch (excluding memory) wafer shipments, TSMC's 12 inch wafer shipments accounted for 21%. According to the number of films shipped, it seems to have little impact. On the other hand, from the perspective of foundry revenue, TSMC accounts for 56% of the total global foundry revenue. At the beginning of the second quarter, TSMC performed well. In 2017, TSMC accounted for about 70% of the advanced process revenue of global wafer foundries

Lin Jianhong further explained that the main customers of 12 inch wafers are the industry. Apple and Huawei mainly place orders for TSMC; In addition, in terms of high-performance budget, NVIDIA and Xilinx wafers are mainly produced in TSMC

the aforementioned industry insiders also said that TSMC's business is relatively complicated, from the core chips inside to various consumer electronics chips such as computers. It then introduced that because TSMC has a relatively advanced manufacturing process, other manufacturers do not have such supply capacity, so once it encounters even a short-term shutdown, the impact will not be small. TSMC's IT capability is still very strong. I think this is an unexpected and relatively large loss for them

in the 2017 financial report, TSMC said that the company has become the largest professional integrated circuit manufacturing service company in the world. The share of professional integrated circuit manufacturing services has reached 56%

in 2017, TSMC and its subsidiaries owned and managed more than 11million 12 inch wafers. Among the sales of 12 inch wafers, the sales amount of wafers less than or equal to 28 nm was about 58%. It is estimated that in 2018, the production of 12 inch wafers will be about 10000 pieces, with an annual growth rate of 9%. It is expected that the sales amount of wafers less than or equal to 28 nm will reach 60% - 70%

Wei Zhejia said that fortunately, customers showed understanding of the company's situation

he said that in addition to dealing with the virus in time, TSMC has also communicated with all customers, including the adjustment of wafer delivery time. In the face of the inquiry, he said that the customer did not ask for liquidated damages, and the customers I met were quite satisfied with our emergency measures

he added that several customers even told him that we believe in TSMC

from the perspective of industry performance, Lin Jianhong told that the current global monthly production capacity of 12 inch wafer shipments is about 5.9 million pieces, slightly higher than the expected output of 12 inch wafer factories. However, considering the actual factors such as experimental chip delivery and yield loss, the demand for wafers in factories will be increased. At present, the global supply and demand of 12 inch wafers is still tight

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