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Can a virus delay the 2018 iPhone launch?

Published Aug 6th, 2018 7:45AM EDT
iPhone X Plus Release Date
Image: Zach Epstein, BGR

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Out of the three new iPhones that Apple will unveil in mid-September, the cheapest and most wanted version will be supposedly delayed because of alleged yield issues with the phone’s most important component. That would be the 6.1-inch LCD iPhone X successor if you were wondering, which various sources say that you won’t be able to buy at launch in late September. Screen manufacturing issues are to blame so you can expect the handset to launch a few weeks later.

But, over the weekend, a new issue that may delay the 2018 iPhone launch came to light. A virus attack on TSMC, which provides one of the most critical iPhone and iPad components, the processor, took out the Taiwanese company, affecting overall production.

TSMC is the exclusive provider of the A12 chips that will power all of this year’s iPhones and new iPad Pros. The A12 series will be Apple’s first 7nm chip, expected to deliver significant performance and efficiency gains over its predecessor, which is already well above its competitors.

A virus on Friday evening almost shut down TSMC production, Bloomberg reports, with 80% of the fabrication tools having been affected. The company has restored output since then but said the incident would delay shipments, without specifying what customers will be affected. Apple is, without a doubt, TSMC’s most prized contract, as TSMC fought off Samsung to win exclusivity for iPhone chips. Apple currently accounts for 21% of TSMC’s revenue.

This marks the first time TSMC was brought down by a virus, which the company says was a result of a mistake during installation that spread through its network. The details are murky. Apparently, a “misoperation” during the installation of a new tool allowed the virus to spread to the entire network as soon as the new device was hooked up to it.

TSMC expects a 3% drop in revenue for the third quarter, compared to initial guidance, and a 1% drop when it comes to gross margin.

The report quotes a Sanford C. Bernstein analyst who said in a research note on Monday that he thinks all of TSMC’s 12-inch wafer fabrication plants had been infected. Those are the plants that make the 7nm chips for Apple.

Industry sources familiar with the chain of events that followed the virus attack told Digitimes that TSMC’s major 12-inch fabs are among the ones impacted by the attack. Some fabs were shut down for as much as 10 hours, which resulted in damage to several thousand wafers.

Digitimes notes that at Fab 15 TSMC is ramping up 7nm chip output to fulfill orders from mainly Apple, although other companies including AMD, Qualcomm, Nvidia, Xilinx, and various ASIC developers.

TSMC said that third-quarter shipments delays would be recovered next quarter.

Chris Smith Senior Writer

Chris Smith has been covering consumer electronics ever since the iPhone revolutionized the industry in 2008. When he’s not writing about the most recent tech news for BGR, he brings his entertainment expertise to Marvel’s Cinematic Universe and other blockbuster franchises.

Outside of work, you’ll catch him streaming almost every new movie and TV show release as soon as it's available.

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