Cyberattack Hits US Defense Supplier of Microchips, Disrupting Operations

 An ‘unauthorized party’ disrupted Microchip Technology’s operations, the firm said in a filing.

A member of an alleged hacking group is seen in a file photo. 

U.S.-based chip manufacturer Microchip Technology said that it was targeted in a cybersecurity incident that compromised “certain servers and some business operations,” according to a filing it submitted to the U.S. Securities and Exchange Commission (SEC).

Microchip Technology supplies microchips to the U.S. defense industries, including for missile defense and precision strike systems, its website says. It also supplies chips used in image processing, control centers, radar systems, and other systems.

The filing said that an “unauthorized party” on Aug. 17 “disrupted the company’s use of certain servers and some business operations,” adding that it took “additional steps to address the incident.” The firm did not disclose the identity of the party that allegedly accessed its systems.

That included “isolating the affected systems, shutting down certain systems, and launching an investigation with the assistance of external cybersecurity advisors,” the company said.

The cybersecurity incident has impacted its manufacturing facilities, which are now “operating at less than normal levels” and is affecting its ability to fulfill orders, the firm said.

“The company is working diligently to bring the affected portions of its IT systems back online, restore normal business operations, and mitigate the impact of the incident,” the filing stated.

It’s unclear what the nature of the incident was. No ransomware operation or hacking group has claimed responsibility for the attack.

Also unclear is whether any sensitive data was compromised in the attack. The company said the full scope, nature, and impact of the incident was not yet known and it has not determined whether the disturbance was likely to materially affect its financial condition.

Based in Chandler, Arizona, Microchip Technology says it has 123,000 customers across multiple sectors, including automotive, consumer, aerospace, defense, communications, and industrial markets, the company says.

The company, shares of which were down about 2 percent in extended trading, has been grappling with slowing orders for chips as clients work through excess inventory built up during the COVID-19 pandemic.

In January, the Biden administration awarded the firm $162 million to boost the U.S.’s defense, aerospace, and automotive industries, signaling the company’s importance to the military industry.

Microchip giant Advanced Micro Devices, better known as AMD, had also said earlier this year it was investigating claims that its data was stolen in a hack.

About two months ago, Taiwan-based chip-parts manufacturer GlobalWafers Co. told local media outlets that it was struck by a cyberattack that also impacted some of its operations. In 2022, the firm’s Japanese branch was targeted by the Pandora ransomware group.

There have also been attacks targeting chipmakers TSMC and Nexperia in the past year or so. And notably, there was a ransomware incident involving Nvidia in 2022.

The incident involving Microchip Technology comes amid tensions in the Chinese and U.S. microchip markets. Since 2022, the United States has banned exporting advanced chips and manufacturing equipment to China, while the Chinese regime has said it is phasing out chips made by AMD and Intel for its government systems.

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