Applied Materials, a technology provider for the semiconductor industry, saw the financial implications of a recent ransomware attack equate to $250 million.
Cyber risk as business risk: the Applied Materials incident.
Semiconductor technology giant Applied Materials saw financial losses of $250 million in sales this quarter due to a cyberattack, the Silicon Valley Business Journal reported Friday. The cyberattack, a ransomware attack, impacted one of the company’s third-party suppliers, deduced by industry analysts to be MKS Instruments, a technology and engineering company, the Record wrote last week.
Applied Materials and MKS Instruments.
Tech company MKS Instruments rescheduled its earnings call for their fourth quarter to the 28th of this month, due to a ransomware attack observed on the third. In a conference call last Thursday, recounted by the Record, Applied Materials Chief Executive Officer Gary Dickerson said, “Very recently, one of our major suppliers encountered a disruption that will impact our second-quarter shipments,” and although MKS Instruments is never singled out in particular, analysts strongly pinpoint them as the supplier in question. The Record reported that MKS is in recovery and the company says that the ransomware attack is contained, though there has been no cybercriminal claim for the attack.
The financial implications of cyber risk.
In the recent earnings report release from Applied Materials, the company anticipates the second fiscal quarter of this year to net $6.40 billion and cites “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.” Cyber risks are increasingly costly to organizations, with this incident – including the postponement of MKS Instruments’ earnings call – only continuing to evidence the costly nature of cybercrime.
Expert commentary on the Applied Materials incident.
Ted Miracco, CEO at Approov, notes that the chip shortage may cause more future incidents:
“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 at Horizon3.ai, discusses the physical and tangible outcomes coming to light in the wake of ransomware attacks:
“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 [is] 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,” said Knode. “The days of presuming this to be an IT or cybersecurity problem are long gone.”