Taiwan Semiconductor Manufacturing Company (TSMC) posted a healthy jump in both its net profit and consolidated revenue in the third quarter on stronger-than-expected smartphone demand, particularly Apple’s iPhones.

The company is considered to be the exclusive maker of A10 chips used in Apple’s iPhone 7 and 7 Plus and also supplies chips to many other smartphone vendors.

TSMC’s Q3 net profit rose 28 per cent to TWD96.8 billion ($3.05 billion) on revenue of TWD260 billion, which was up 23 per cent from a year ago.

Its gross margin in the quarter rose 2.5 points year-on-year to 50.7 per cent, while its operating margin increased 3.9 points to 40.8 per cent.

Revenue from its 16/20nm process technology accounted for 31 per cent of its wafer sales, while 28nm shipments accounted for 24 per cent.

“Despite a less favourable exchange rate than our forecast, third quarter revenue surpassed the high-end of our guidance given three months ago, mainly due to strong demand in the overall smartphone market,” said TSMC CFO Lora Ho.

Looking ahead to Q4, she said TSMC expects revenue to increase 5-10 per cent year-on-year to TWD255 billion to TWD258 billion. Its capex budget for the full year is expected to be slightly above $9.5 billion.

Revenue from customers based in North America accounted for 68 per cent of total revenue, nearly the same as in Q3 2015, but revenue from Asia Pacific customers rose to 15 per cent in Q3 from 12 per cent a year ago. Revenue from China-based customers was steady at 6 per cent of the total.