Tower Semiconductor Expects Cyber Attack To Hit Q3 Results

Israel-based chipmaker Tower Semiconductor said it expects the recently disclosed cyber attack to impact its third-quarter results. The stock fell 1.3% in US trading on Thursday.

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In an update provided on Sept. 10, Tower Semiconductor (TSEM) stated that all of its manufacturing sites are operational and are targeting full capability within the next few days. Earlier on Sept.6 the company revealed that it halted some of its servers and held operations in certain manufacturing facilities as a preventive measure following a security breach on some of its systems as a result of a cyber attack.

Since the start of this year, Israel has faced several cyber attacks on power stations and water utilities for which authorities are blaming Iran or Iranian-backed groups. Last month, Reuters reported that Israel thwarted a cyber attack on its defence industry by a hacking group called Lazarus.

Commenting on the impact of the cyber attack on its systems, Tower said, “Due to immediate and effective procedures, Tower is confident of the functional quality of the work in progress and production line inventories, with company and customer data remaining protected. Due to the manufacturing disruption, the company expects some level of impact to its third quarter results.”

The semiconductor company did not provide more details on the extent of the impact on its third-quarter performance. Back in July, Tower forecast third-quarter revenue to come in at $320 million, with an upward or downward range of 5%. In 2Q, revenue grew 1.3% to $310 million. (See TSEM stock analysis on TipRanks)

Last month, Jefferies analyst Mark Lipacis maintained his Buy rating on the stock with a price target of $25. Lipacis forecasted EPS of $0.16 for the third quarter.

The Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 2 recent Buy ratings. TSEM stock has plunged 25.3% year-to-date, with the average analyst price target of $25 indicating upside potential of 39.4% lies ahead.