Late last month Patently Apple posted a report titled "TSMC Confirms 'Monopoly' over iPhone 7 Chips and likely to Win Orders for Apple's iPhone 8." I noted in the report that the founding chairman of Apple's chip supplier TSMC (Taiwan Semiconductor Manufacturing Co.) said during a recent event that he was bullish over future sales growth for his firm while confirming his company had a monopoly over chip manufacturing for Apple's current smartphone range. Chang also couldn't pass on taking a stab at his competitor Samsung by stating that "It's really bad that Samsung has not yet found out the real cause of the explosion. I think it's terrible because it's a reliability issue … " Today we can see why TSMC's chairman was happy with Apple as Bloomberg reports that "The world's largest contract chipmaker has surged 32 percent in 2016, climbing to its highest level versus MSCI Inc.'s global gauge of technology stocks on record." Why? Because of their iPhone 7 monopoly of course. 

The $156 billion company now accounts for 16 percent of Taiwan's entire equity market value, the biggest proportion according to data stretching back 13 years, and none of the 33 analysts who cover it recommend selling the shares.

While the company has benefited from a broader rally in technology companies this year that's seen rivals including Intel Corp. reach multi-year highs, TSMC is luring investors with record profit as demand for Apple Inc.'s new iPhones fuels orders for its processor chips. With Samsung Electronics Co. faltering after the scrapping of its Note 7 device, Value Investment Principals Ltd. and Manulife Asset Management Co. say the stock has room to rise further.

TSMC has been able to count on demand for Apple's new iPhone 7 models to fuel sales of the A10 processor it makes, helping it weather a slowdown in the global smartphone market as it invests in more advanced production technology. The company will "soon" start mass production of chips using 10-nanometer processors, said Elizabeth Sun, a spokeswoman at TSMC. The smaller chip size allows handset makers more room for new hardware features. Our cover graphic shows you TSMC's new 10nm plant.

Data compiled by Bloomberg shows that analysts are projecting TSMC's net income will increase 30 percent this quarter.

While TSMC's success relies on the iPhone 7, everything we hear that is coming to the anniversary iPhone in 2017 would indicate that TSMC's success should continue if they're able to secure an exclusive deal for the iPhone 8. That's something TSMC's chairman hinted at last month. For more on this, read the full Bloomberg report here.

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