Apple’s latest iPhone lineup is defying initial reports of weak demand, with sales surging in India and T-Mobile CEO Mike Sievert revealing that the carrier is selling more iPhone 16 models this year compared to last year. This uptick in sales is expected to continue, driven by the growing demand for generative artificial intelligence (AI) features on the latest Apple devices. With an installed base of 1.5 billion iPhones, 300 million of which haven’t been upgraded in four years, the potential for a significant sales boost is substantial.
However, it’s not just Apple that stands to benefit from the success of the iPhone 16. Taiwan Semiconductor Manufacturing (TSMC), the company responsible for manufacturing the processors that power Apple’s iPhones, is poised to reap significant rewards. TSMC’s 3-nanometer process node is used to manufacture the A18 and A18 Pro processors found in the iPhone 16 models, which boast impressive performance gains and power efficiency.
As Apple continues to ramp up production of its latest iPhones, TSMC’s revenue is expected to grow significantly. The company’s monthly revenue has already seen impressive year-over-year increases, with a 33% jump in June, 45% in July, and 33% in August. With Apple accounting for a quarter of TSMC’s revenue, the foundry giant’s growth prospects are closely tied to the iPhone maker’s success.
What’s more, TSMC is trading at a relatively affordable valuation compared to Apple, making it an attractive option for investors looking to capitalize on the growth of the AI chip market. With estimates suggesting that TSMC’s revenue will continue to grow in the coming years, now may be the perfect time to invest in this semiconductor stock.
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