iPhone 16 Evolution: ASE, VisEra, and TSMC Boost Orders

Apple is scheduled to unveil the highly anticipated iPhone 16 series on September 10. As TSMC accelerates the production of the new A18 series processors using cutting-edge 3nm technology, significant opportunities are emerging for packaging and testing partners, including prominent firms such as ASE Technology Holding and VisEra, a TSMC investment. The production volume related to Apple is expected to increase by 20% compared to last year, presenting substantial growth prospects for these companies.

While initial market attention has been on major suppliers like TSMC, Foxconn, and Largan Precision, the crucial role of packaging and testing firms has gained prominence. The iPhone 16 series is anticipated to feature notable innovations, including the transition from mechanical to capacitive touch buttons for volume and power controls. This advancement will mark Apple's first AI-enabled smartphone, generating new business opportunities within the packaging and testing sector.

Industry experts project that the iPhone 16 series will be Apple's first generative AI smartphone, with strong expectations to drive substantial upgrade demand. Forecasts suggest that the iPhone 16 series could achieve sales of over 95 million units, with Apple securing production capacity for the latter half of this year and early next year. This represents a notable increase compared to the previous iPhone 15 models.

A key development is the shift in the iPhone 16's design from mechanical to capacitive touch buttons. ASE Technology Holding has secured a significant contract for system-in-package (SiP) solutions for these new capacitive touch buttons, positioning itself as a major player in the new device's supply chain.

Although ASE Technology Holding typically refrains from commenting on specific client orders, sources indicate that production for the iPhone 16's capacitive touch buttons has commenced this quarter. Capacity is expected to expand throughout the second half of the year, with ASE's orders anticipated to remain robust into early next year.

Additionally, TSMC is intensifying production and delivery of the A18 and A18 Pro processors for the iPhone 16 series. Sources report that Apple has committed to ordering over 50,000 wafers per month of TSMC's 3nm capacity, with further growth expected as non-Apple AI devices also enter the market. TSMC's 3nm output is projected to increase each quarter in the latter half of the year.

TSMC's investment in VisEra is also benefitting from the iPhone 16 launch, with VisEra securing a major contract for CMOS image sensor (CIS) packaging. Despite rumors suggesting that the iPhone 16's camera resolutions will remain consistent with previous models, it is noted that Apple is integrating atomic layer deposition (ALD) technology into the rear camera lens coatings to significantly reduce glare. This update requires a redesign of the CIS, with VisEra aiming for a 20% increase in output to meet rising demand and enhance its production capacity in the latter half of the year.