Manufacturing Becomes Prime Testing Ground for Ransomware Attackers, Report Reveals

The latest Sophos State of Ransomware in Manufacturing and Production 2025 report reveals manufacturing has become a "testing ground for ransomware hackers" despite improved defenses. While data encryption rates fell to 40% (down from 74% in 2024), attackers are shifting to extortion-only tactics, forcing companies to pay ransoms reaching $1 million even when encryption fails.

Manufacturers face a critical paradox: better technical defenses aren't enough when attackers pivot to data theft extortion methods. The report surveyed 332 IT and cybersecurity leaders whose organizations experienced ransomware attacks targeting industrial control systems in the past year, revealing a sector caught between improved resilience and sophisticated new extortion strategies.

The evolving threat landscape

Manufacturing organizations have made significant strides in preventing complete ransomware execution. Half of all attacks were stopped before encryption could take place – a major improvement from previous years. Recovery times are also accelerating, with 58% of organizations reporting full recovery within one week, compared to 44% the year before.

However, these defensive improvements have triggered a strategic pivot by attackers:

• Extortion-only attacks (data theft without encryption) jumped to 10% of incidents, up from just 3% in 2024
• Among organizations suffering encryption, 39% also had data stolen – one of the highest rates across all surveyed sectors
• Despite improved defenses, 51% of organizations still paid ransoms when encrypted, with payments averaging $1 million

Alexandra Rose, Director of Threat Research at Sophos Counter Threat Unit, explained: "Manufacturing depends on interconnected systems where even brief downtime can stop production and ripple across supply chains. Attackers exploit this pressure: despite encryption rates falling to 40%, the median ransom paid still reached $1 million."

The report identified key attack vectors that remain consistently exploitable. The primary technical root cause was exploited vulnerabilities, cited in 32% of attacks. Organizational weaknesses included:

• Lack of expertise (42.5%)
• Unknown security gaps (41.6%)
• Inadequate protection (41%)

These findings suggest attacks succeed not through unstoppable zero-day exploits but through preventable organizational and technical gaps.

The human impact of ransomware

Beyond technical and financial impacts, manufacturing ransomware attacks create significant human toll:

• 47% of respondents reported increased anxiety
• 44% faced heightened pressure from senior leaders

This stress compounds the sector's existing expertise shortages, creating a cycle where lack of skilled personnel contributes to successful attacks, which further increases pressure on already strained teams.

Recovery costs average $1.3 million even when data encryption is prevented. This high cost reflects the critical nature of manufacturing operations, where even brief downtime can cascade through production schedules and supply chains.

Organizations facing ransomware incidents must implement comprehensive ransomware response strategies that address both technical recovery and business continuity to minimize operational disruptions.

OT and IT convergence increases risk

The manufacturing sector faces unique challenges due to the convergence of operational technology (OT) and information technology (IT). As Manav Mittal, a project management expert specializing in automation within utilities and energy, noted in a December 2025 blog post:

"Manufacturing systems, especially those using SCADA technology, IoT devices, and other critical technologies, depend heavily on efficient IT support to ensure minimal downtime and optimal performance. However, challenges persist when addressing IT issues in manufacturing systems, particularly during production incidents."

Research from Rockwell Automation's "The State of Smart Manufacturing Report: Cybersecurity Findings" confirms this shift, showing cybersecurity now ranks as the second most serious external risk for manufacturers, just behind economic conditions.

The IT/OT security gap

One critical enhancement to security posture involves addressing the growing security gap between IT and OT environments. According to the Industrial Cybersecurity Pulse 2025 survey, 67% of manufacturers report significantly different security standards between their IT and OT networks, creating exploitable vulnerabilities at integration points.

Manufacturing organizations must implement security solutions that span both environments, recognizing that traditional IT security approaches often fail to account for the operational constraints of production systems. This includes developing specialized threat detection capabilities for industrial protocols and implementing segmentation strategies that protect critical operational assets.

Addressing supply chain vulnerabilities

Another key vulnerability in manufacturing environments stems from complex supply chain relationships. The report shows attackers increasingly target smaller suppliers as entry points to larger manufacturing operations. Small businesses facing sophisticated ransomware threats often lack robust security controls, making them ideal initial compromise targets that provide access to larger manufacturers' networks.

Manufacturing security leaders should implement vendor risk management programs that include:

• Security requirements in supplier contracts
• Regular assessment of third-party access points
• Monitoring of lateral movement from supplier connections
• Segmentation of supply chain integrations

Action steps for manufacturing security leaders

Security professionals in manufacturing must adapt their strategies to address the evolving threat landscape:

Shift defense focus from encryption to exfiltration

With attackers moving to extortion-only tactics, preventing data theft becomes as critical as preventing encryption. Recommendations include:

• Implementing Managed Detection and Response (MDR) for 24/7 continuous monitoring
• Prioritizing aggressive patching of vulnerabilities
• Hardening systems against common entry points like malicious emails

Address expertise gaps and resource shortfalls

The report highlights lack of expertise as the primary organizational weakness enabling attacks. Manufacturing security leaders should:

• Invest in security talent through training, hiring, or outsourcing
• Align leadership expectations about the changing nature of ransomware
• Use attack data to advocate for necessary security resources

Develop comprehensive incident response plans

With interconnected IT/OT environments creating unique recovery challenges, manufacturers need robust response strategies:

• Test scenarios that account for operational technology and supply chain dependencies
• Regularly practice data restoration to reduce recovery time
• Ensure backups are secure and readily accessible

This report offers several practical takeaways for manufacturing organizations:

1. Evaluate your exposure to extortion-only attacks by conducting data sensitivity assessments and identifying where critical intellectual property resides

2. Review incident response plans specifically for scenarios where attackers threaten to release stolen data rather than encrypt it

3. Calculate the true cost of operational downtime to justify appropriate security investments, recognizing that the average $1.3 million recovery cost doesn't capture full business impact

Manufacturing's position as a ransomware testing ground likely reflects the sector's unique combination of high-value intellectual property, operational sensitivity to downtime, and the growing IT/OT attack surface. By recognizing this targeted status and implementing appropriate defenses, manufacturers can better protect their operations from both traditional ransomware and emerging extortion strategies.