Apple Chip Production Finally Improving After 7 Months Of Decline

Following seven months of dampened numbers, foundry (chip) production numbers have been seen on the rise for Apple Inc. AAPL, BlueFin Research Partners shared.

Since December, the figures have "edged up modestly" on a monthly basis, with forecasts now projected to grow 1.4 percent.

Last month, the forecast growth was set at 1.0 percent, according to BlueFin analysts.

"The modest improvements in the past few months add to our conviction that the foundries have finally worked through the inventory depletion cycle, while overall semiconductor demand remains muted," the analysts explained.

It's All In The Numbers

Of particular note, the research firm drew attention to historical data, which indicate a decline of 1–3 percent annually over the past half-decade. Therefore, against that backdrop, the 1.4 increase is significant.

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However, the analysts were quick to note that "the industry was coming off of a very weak Q4," and as such, the situation "set up a relatively easy sequential comparison."

The analysts elaborated, "A great majority of the TSM forecast increase was a result of the Apple (AAPL) A10 processor ramp for the iPhone 7. Our research indicates that 16nm TSM wafer starts bottom in April before ramping sharply in May as the A10 begins mass production.

"Our checks suggest that A10 wafer starts are projected to exceed 50K wpm in June. These production levels are well above TSM's A9 output last year, while similar to the production levels of the initial 20nm A8 processor production ramp. We believe this further validates TSM's expected sole-sourced position for the A10, and supports the September timeframe for the iPhone 7 launch.