Applied Materials is saying that a breach at one of its suppliers would cost them $250 million in sales in the second quarter:
In the second quarter of fiscal 2023, Applied expects net sales to be approximately $6.40 billion, plus or minus $400 million, which includes ongoing supply chain challenges and a negative estimated impact of $250 million dollars related to a cybersecurity event recently announced by one of our suppliers. Non-GAAP adjusted diluted EPS is expected to be in the range of $1.66 to $2.02.
A clue was dropped in the earnings call:
“Very recently, one of our major suppliers encountered a disruption that will impact our second-quarter shipments,”
Though not named in the announcement, the supplier is believed to be MKS instruments of Andover MA. MKS instruments was hit by a cyber-attack on February 3rd. The attack caused the company to shut down operations at certain facilities while it tries to assess the damages. The company’s website was still down as of Thursday afternoon. The company has had to reschedule its fourth quarter earnings call and said the ransomware event had a material impact on its “ability to process orders, ship products and provide service to customers” in its vacuum and photonics divisions.
Here’s the connection between the two. In addition to Applied Materials, MKS supplies the world’s largest chip manufacturers with products, including Samsung Electronics and Taiwan semiconductor manufacturing the world’s two largest chip makers. Intel and ASML Holding NV are also customers. Meaning that this is very, very bad for a whole lot of people.
Ted Miracco, CEO, Approov:
“The semiconductor supply chain remains one of the most complicated and most critical supply chains that underpin the entire global economy. As we witnessed last year, interruptions in the semiconductor market can have long term consequences that impact everything from automobiles to the price of food.
“With the ongoing “Chip War” between the US and China, we should expect more disruptions like this in the future, and quarterly earnings should be the least of our concerns. These attacks on the semiconductor supply chain deserve a lot more attention than the latest balloon incidents.”
Monti Knode, Director of Customer Success, Horizon3.ai:
“It’s interesting that MKS called out “had a material impact”, almost like they had to announce and clarify that a cyberspace attack could and did have a tangible outcome. We’re seeing this realization more in both public and private industry, especially in our Department of Defense which viewed as cross-domain operations; Russia has been doing this for years, and now the world is seeing it live in Ukraine and even here in the US (ref https://www.mirror.co.uk/news/us-news/breaking-russian-hackers-target-hospitals-29053567).
“The days of presuming this to be an IT or cybersecurity problem are long gone.”
This is a clear example of what a supply chain attack can do to you if you and your partners aren’t careful. Thus you and those you work with have to make sure you’re on the same page from a cybersecurity standpoint. Otherwise, this is the sort of thing that can happen to you.
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This entry was posted on February 17, 2023 at 2:20 pm and is filed under Commentary with tags Hacked. You can follow any responses to this entry through the RSS 2.0 feed.
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Supply Chain Attack Costs $250 Million
Applied Materials is saying that a breach at one of its suppliers would cost them $250 million in sales in the second quarter:
In the second quarter of fiscal 2023, Applied expects net sales to be approximately $6.40 billion, plus or minus $400 million, which includes ongoing supply chain challenges and a negative estimated impact of $250 million dollars related to a cybersecurity event recently announced by one of our suppliers. Non-GAAP adjusted diluted EPS is expected to be in the range of $1.66 to $2.02.
A clue was dropped in the earnings call:
“Very recently, one of our major suppliers encountered a disruption that will impact our second-quarter shipments,”
Though not named in the announcement, the supplier is believed to be MKS instruments of Andover MA. MKS instruments was hit by a cyber-attack on February 3rd. The attack caused the company to shut down operations at certain facilities while it tries to assess the damages. The company’s website was still down as of Thursday afternoon. The company has had to reschedule its fourth quarter earnings call and said the ransomware event had a material impact on its “ability to process orders, ship products and provide service to customers” in its vacuum and photonics divisions.
Here’s the connection between the two. In addition to Applied Materials, MKS supplies the world’s largest chip manufacturers with products, including Samsung Electronics and Taiwan semiconductor manufacturing the world’s two largest chip makers. Intel and ASML Holding NV are also customers. Meaning that this is very, very bad for a whole lot of people.
Ted Miracco, CEO, Approov:
“The semiconductor supply chain remains one of the most complicated and most critical supply chains that underpin the entire global economy. As we witnessed last year, interruptions in the semiconductor market can have long term consequences that impact everything from automobiles to the price of food.
“With the ongoing “Chip War” between the US and China, we should expect more disruptions like this in the future, and quarterly earnings should be the least of our concerns. These attacks on the semiconductor supply chain deserve a lot more attention than the latest balloon incidents.”
Monti Knode, Director of Customer Success, Horizon3.ai:
“It’s interesting that MKS called out “had a material impact”, almost like they had to announce and clarify that a cyberspace attack could and did have a tangible outcome. We’re seeing this realization more in both public and private industry, especially in our Department of Defense which viewed as cross-domain operations; Russia has been doing this for years, and now the world is seeing it live in Ukraine and even here in the US (ref https://www.mirror.co.uk/news/us-news/breaking-russian-hackers-target-hospitals-29053567).
“The days of presuming this to be an IT or cybersecurity problem are long gone.”
This is a clear example of what a supply chain attack can do to you if you and your partners aren’t careful. Thus you and those you work with have to make sure you’re on the same page from a cybersecurity standpoint. Otherwise, this is the sort of thing that can happen to you.
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This entry was posted on February 17, 2023 at 2:20 pm and is filed under Commentary with tags Hacked. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.