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New Apple iPhones May be Facing Chip Delays For This Reason

Apple may be facing a delay with face chips with its new iPhones due to a major supplier being hit with a computer virus.

Taiwan Semiconductor Manufacturing Co., which makes processors for Apple’s iPhones, had a computer virus outbreak where it warned after that it could cause shipment delays as well as lead to a hit to revenue.

The outbreak occurred on August 3, and was publicly disclosed Saturday on the 4th. It affected a number of computer systems as well as “fab tools” that are required in the chip-making process.

TSMC blamed the virus outbreak on a “misoperation” during the software installation process for a new tool. No confidential information was compromised according to the company.

TSMC said that there could be delays to product shipments and that it would also lower its third quarter revenue by 3 percent, or $255 million, from its previous guidance.

On Sunday the 5th, TSMC announced that 80 percent of its impacted tools had been recovered and that all issues would be resolved on Monday. The company had said that most of its customers have been notified but did not specify who it had contacted.

Apple is one of TSMC’s major customers, with TSMC making the A11 processor that is currently in the iPhone X. The company is currently making the next-generation A12 processor that is expected to be in Apple’ new smartphones, which by rumor, are supposed to be released later this year.

According to analysts, there will not be a big impact to Apple. Fubon Research published a note that said it has forecast around 1.5 million to 1.7 million A12 chips being delayed, but said it expected iPhone production in the second half of 201 to be 83 million units.

“Since TSMC indicated the delayed shipment from this incident will be recovered in the following quarter, we think there will be no meaningful impact on Apple’s new coming iPhone,” Fubon wrote.

“In our view, ‘misoperation’ is simply not good enough an explanation. Although TSMC pointed out data integrity and confidential information were not compromised, we think TSMC needs to provide more details of what happened to alleviate the security concerns of customers and long-term investors,” Fubon also wrote.

According to analysts at KGI, any impact to iPhones would be limited because the supply chain “usually prepares for these incidents and manufactures surplus chipsets during the initial ramp-up stage.”

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