Chip maker Microchip suspended part of its business operations after a large-scale cyberattack

Microchip Technology, one of the leading suppliers of chips to the US defense industry, said it was the victim of a cyberattack that forced it to shut down some systems and scale down operations.

Image source: Wikipedia.org

According to the company’s statement filed with regulators, suspicious activity in information systems was detected on August 17. Two days later, on August 19, Microchip confirmed that “some servers and some business operations” had been hacked, Bloomberg reports. “We immediately took steps to address the impact of the breach, including isolating the affected systems, shutting down certain systems, and launching an investigation with the assistance of external cybersecurity consultants,” Microchip said.

As a result of the incident, production is currently “operating at below-normal levels,” which is impacting its ability to fulfill customer orders. “We are working diligently to return the affected portions of our IT systems to normal operations, restore normal business operations, and mitigate the impact of the incident,” Microchip added.

Bloomberg notes that just two months ago, Taiwanese chip component maker GlobalWafers also suffered a cyberattack that affected parts of its production. And in 2022, Nvidia was attacked by ransomware. Nvidia said at the time that its “business and commercial activities were not affected.”

The attack comes amid heightened competition between countries to dominate the chip market, both to ensure national security and to prevent the supply chain disruptions the world has faced during the COVID-19 pandemic. It is unclear whether the cyberattack will have a significant impact on Microchip’s financial performance.