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Computer virus costs TSMC almost NT$2.6 billion

2018/11/16 15:35

Taipei, Nov. 16 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, reported Thursday that it lost NT$2.6 billion (US$84.28 million) in the third quarter of the year due to a virus infection of its computer system in August.

The third-quarter report showed that the NT$2.596 billion was booked as operating costs, which market analysts said was offset by TSMC's foreign exchange gains.

TSMC reported a gross margin -- the difference between revenue and cost of goods sold -- of 47.4 percent in the third quarter, well within its target range of 47 percent to 49 percent and only 0.4 percentage points lower than the previous quarter.

The virus, a variant of the 2017 WannaCry ransomware, hit TSMC factories in Taiwan on Aug. 3, forcing the closure of all its production lines until Aug. 6.

TSMC said the problem had not been caused by a hacker but rather was due to human error when a new tool was connected to the company's computer network without any precautionary virus scans.

In October, TSMC Chief Executive Officer and Vice Chairman C.C. Wei (魏哲家) assured investors that the company would tighten its security measures by strengthening its firewall to prevent a repeat of the incident.

Despite the losses from the virus infection of its computer system, TSMC generated US$8.49 billion in consolidated sales in the third quarter, an 8.1 percent quarterly increase and higher than its estimated range of between US$8.28 billion and US$8.38 billion.

In Taiwan dollar terms, the company's third-quarter sales were NT$260.35 billion, up 11.6 percent from the previous quarter.

TSMC also reported an increase in its third-quarter net profit, which rose 23.2 percent sequentially to NT$89.07 billion during the industry's peak season but was a 0.9 percent decline from a year earlier.

According to TSMC, chips on its latest 7-nanometer process, which command a higher profit margin, accounted for 11 percent of its total third-quarter sales and that figure is expected to rise to more than 20 percent in the fourth quarter.

(By Chang Chien-chung and Frances Huang)Enditem/pc