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Apple Is Raising TSMC Chip Orders to Meet Strong iPhone Demand

Debby Wu

(Bloomberg) -- Apple Inc. has asked chipmaking partner Taiwan Semiconductor Manufacturing Co. to increase its output of A-series processors this quarter in order to satisfy higher-than-anticipated iPhone demand, people familiar with the company’s plans said.

The iPhone 11 and 11 Pro models were well received on their debut in the fall and their sales in China have been particularly strong, outselling 2018’s releases in a market that has otherwise been shrinking. Even without fifth-generation wireless networking, iPhone demand has been outperforming the market and Apple’s expectations, and the company asked assembly partners to increase their production of the latest generation.

The most affordable iPhone 11 model, equipped with an LCD screen, was a particular driver for the increased demand, one person said.

New Low-Cost IPhone Said to Enter Mass Production in February

Along with the popularity of existing models, Apple’s business with TSMC is also set for a boost from an imminent iPhone SE successor, a low-cost model that will begin mass production in February ahead of an official unveiling as soon as March, Bloomberg News reported. It will be built around the same processor as the iPhone 11 generation.

TSMC spokeswoman Nina Kao said the company doesn’t comment on its business with any specific customer. An Apple spokeswoman declined to comment.

The Taiwanese chipmaker recently reported earnings above most analysts’ expectations and it forecast another good quarter ahead. Though it faces potential headwinds from the threat of tightening U.S. sanctions on key customer Huawei Technologies Co., analysts believe additional demand from Apple and Advanced Micro Devices Inc. will replace any potential Huawei drop-off.

--With assistance from Mark Gurman.

To contact the reporter on this story: Debby Wu in Taipei at dwu278@bloomberg.net

To contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Vlad Savov

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