16nm Production Increases At TSM Are For The Apple Watch, Not The iPhone

According to an article in the Commercial Times in Asia published earlier this week, Taiwan Semiconductor Mfg. Co. Ltd. (ADR) TSM had increased its 16nm production for the Apple Inc. AAPL A10 processor, since iPhone 7 sales were exceeding expectations.

Latest checks indicate overall 16nm production was tracking to decline sequentially in Q4, BlueFin’s Paul Peterson said in a report.

“As a side note, the article also erroneously indicated that TSM was ramping a 10nm A10 processor for the iPad Pro; this device is actually a completely different design and thus has a different part number, A10X,” Peterson wrote.

16nm Production

BlueFin’s TSM Supplier Update published on November 9 had estimated a 30 percent sequential decline in the A10 (16nm) production in Q4. The latest checks indicate that although 16nm starts did increase in December, this was only modestly, and the overall 16nm production now on track to recording a 27 percent sequentially in Q4.

The analyst further noted that the modest increase in 16nm production from the previous estimates was not for the A10 processor, but for the S-2 chip for the next generation Apple Watch.

“Additionally, our latest TSM forecast reads indicates that Q4 production levels were reduced by roughly 5 percent for the iPhone fingerprint sensor IC components. This reduction is directionally consistent with the recent 10 percent iPhone cuts for Q1:17 that we highlighted in our December 4th note,” Peterson added.

At Last Check

• Apple shares were up 2.09 percent at $114.46.
• Taiwan Semiconductor shares were up 0.5 percent at $30.19.