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Apple chip supplier TSMC doubling 16nm chip production, hinting at 'iPhone 7' prep

Apple iPhone 7 concept by Yasser Farahi.

Key Apple processor supplier TSMC plans to double its production capacity for 16-nanometer chips in March, reports said on Wednesday, hinting at preparation for future Apple devices.

Capacity will leap ahead from 40,000 12-inch wafers in February to 80,000 by the end of the month, according to the Chinese-language Economic Daily News, quoted by DigiTimes. Neither publication indicated why the company is scaling up so rapidly.

Apple, however, is the biggest among several companies said to be major 16-nanometer clients for TSMC. Others include Xilinx, MediaTek, HiSilicon, Spreadtrum, and Nvidia.

TSMC is moreover rumored to be the primary or sole manufacturer of "A10" processors for next-generation iPhones, which could be churned out using the firm's 16-nanometer FinFET process. Mass production with the process — for all clients — is expected to start in the second quarter.

If Apple intends to ship new flagship iPhones in September as usual, the company will need processor supply to ramp up months beforehand so enough phones can be manufactured for launch. That may be a particular challenge if chip manufacturing duties are no longer being split with Samsung, as they are for the iPhone 6s and 6s Plus.