An employee holds an iPhone X smartphone while assisting a customer during the sales launch at a store in New York, U.S. (Photographer: Michael Nagle/Bloomberg)

Apple Partner Starts Building Chips for the Next Generation of iPhones

(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. has started production of a new chip for Apple Inc.’s next line of iPhones launching later this year, according to people familiar with the matter.

The processor, dubbed A13, went into early test production in April and mass-production is planned for as early as this month, the people said, asking not to be identified discussing internal matters.

As part of its annual iPhone refresh, Apple typically includes significant upgrades to the main processor, boosting speeds and battery life. The company’s chips are often ranked as top performers by analysts and technical websites. That helps set the iPhone apart from its Android-based competition, which relies heavily on Qualcomm Inc. processors. Some rivals, such as Samsung Electronics Co. and Huawei Technologies Co., have embraced Apple’s approach and now make phones using their own chips.

An Apple spokeswoman declined to comment. TSMC spokeswoman Elizabeth Sun also declined to comment.

The U.S. company is extending its in-house design strategy: The iPhone is one of several Apple devices that include custom processors. The company designs similar parts for the Apple Watch, Apple TV, AirPods and HomePod. It also makes specialized chips for Macs and is working on a main Mac processor to eventually replace those supplied by Intel Corp., Bloomberg News has reported.

Traditional central processors are not always the best solution for new tasks such as image and voice recognition. In recent years, Apple has added new components to its chips, including parts that handle graphics and machine learning, a type of artificial intelligence software. It’s also planning other new types of chips, including a cellular modem for making calls and connecting to the internet, and power components based on a recent deal with Dialog Semiconductor Plc.

This year’s new iPhone chips will be featured in all three new models, successors to the iPhone XR, iPhone XS and iPhone XS Max, according to the people familiar with the matter. The new high-end models are code-named D43 and D44, while the update to the iPhone XR is internally dubbed N104, they said.

All three new iPhones will look similar to the current versions, but the iPhone XS and iPhone XS Max updates will gain a third rear camera. The iPhone XR successor will get a second camera on the back.

The third camera on the high-end models will have an ultra-wide-angle lens to produce larger and more detailed photos. It will also enable a broader range of zoom. Apple is also working on an auto-correction feature to fit people back into a photo who may have been accidentally cut out. The second camera on the new XR model will have increased zoom as well.

The iPhone XS and iPhone XS Max successors will be about half a millimeter thicker, according to one of the people, and the back camera array will fit into a square on the top left.

Apple also plans a feature that lets users charge the latest AirPods and other devices by putting them on the back of the new iPhones. That’s similar to a feature Samsung offers on its newest devices, the people said.

©2019 Bloomberg L.P.