What's going on?
TSMC has some good news to share with Apple’s investors: the chipmaker reported strong December sales on Friday.
What does this mean?
TSMC counts Apple as one of its biggest customers, so the chipmaker’s 14% increase in sales from the same time last year isn’t just encouraging news for its own investors: the boost suggests the latest iPhones are flying off the (virtual) shelves too (tweet this). It wasn’t Apple’s only supplier to give a promising update last week either: iPhone assembler Hon Hai Precision Industry reported better-than-expected revenue in December, while Dialog Semiconductor – a rival chipmaker to TSMC – upped its fourth-quarter sales outlook after stronger-than-expected demand for Apple’s 5G tech.
Why should I care?
For markets: There’s no “I” in “iPhone”.
Signs of high iPhone demand were a welcome arrival for Apple’s investors, especially after the company’s earnings update in October fell short on that front. It was particularly encouraging because they’re the first real indication of how the newest iPhone is performing: its delayed launch meant its sales weren’t included in the update, and the company didn’t offer any hints as to how it was selling. TSMC’s announcement, then, might put investors’ minds at rest, sending them into Apple’s next earnings release – which takes place at the end of this month – with a bit more confidence.
The bigger picture: The doctor won’t see you now.
The outlook for the microchip industry is pretty positive overall – so much so that chipmakers haven’t been able to scale up from the pandemic-induced slump quickly enough. Carmakers are reportedly having to slow down production because there aren’t enough chips to go around, and since they don’t pay nearly as handsomely as the likes of Apple, they’ll have to wait their turn…