Ransomware attack on chip supplier causes delays for semiconductor groups

Disruption from a ransomware attack on a little-known supplier to the world’s largest semiconductor equipment manufacturers will continue into March, in a new setback to chip production after years of coronavirus-related delays.

US-based MKS Instruments told investors and suppliers this week that it had yet to fully recover from a “ransomware event”, first identified on February 3, in an attack that has strained supply chains for the global chip industry.

“We’ve begun starting up the affected manufacturing and service operations,” MKS chief executive John Lee said in a call with analysts and investors on Tuesday.

MKS’s customers include many of the largest companies that produce semiconductors and the specialised equipment necessary to manufacture them, including TSMC, Intel, Samsung and ASML.

The company had revealed on Monday that it could still take “weeks” more to restore operations and would cost hundreds of millions of dollars in lost or delayed sales. Most ransomware victims are able to recover in about three weeks, according to industry estimates.

The attack affected “production-related systems” as well as critical business software, MKS said earlier this month, forcing it to suspend operations at some of its facilities. The Massachusetts-based company makes lasers, vacuum systems and other specialised equipment vital to chip manufacturing.

Lee has said the attack “materially impacted” its systems, including its ability to process orders and ship products in its two largest divisions, photonics and vacuum.

After delaying publication of its latest financial results, which were released on Monday, the company has now told the US stock market regulator that it is unable to file its annual report on time. Missing the extended deadline could result in a fine.

Its forecast of “at least” a $200mn hit to its current quarter’s revenues is about a fifth of the $1bn in sales that it had forecast before the attack. Analysts at Cowen, a broker, estimate the final impact on quarterly sales could total as much as $500mn — more than half what Wall Street had previously predicted.

“The full scope of the costs and related impacts of the incident has…