Image source: Apple. 

At this point, it's practically common knowledge that Taiwan Semiconductor Manufacturing Company (TSM -3.45%) is the sole manufacturer of Apple's (AAPL -1.22%) A10 Fusion chip inside the recently announced iPhone 7 and iPhone 7 Plus smartphones.

Today, I'd like to highlight how this is not just a win for the Taiwan-based contract chip manufacturer, but a triple win.

Sole sourcing should help TSMC quite a bit

Last year, Apple split the manufacturing of its A9 chip between TSMC and its longtime rival Samsung (NASDAQOTH: SSNLF). In fact, not only did TSMC wind up sharing the A9 with Samsung -- after TSMC had won the entirety of the prior-generation A8 orders -- but it was also widely reported that it wound up with a minority allocation of the orders.

Tough break, eh?

By going from a minority supplier of the A9 to the sole provider of the A10, TSMC stands to enjoy a nice year-over-year boost in revenue during this iPhone product cycle, though it will be offset somewhat by the fact that Apple's mid-tier iPhones will go from being TSMC-exclusive to split between TSMC and Samsung.

A larger chip size should drive even more wafer sales

Chips are essentially "printed" onto silicon wafers of a fixed diameter -- in the case of the A10 and other leading-edge chips, that diameter is 300 millimeters or just under 12 inches. The individual chips -- referred to as dies -- are then cut out of those wafers and then packaged for use.

Last year's A9 measured in at 104.5 square millimeters in TSMC's 16-nanometer manufacturing technology, according to a measurement from Chipworks.

In a recent column, I estimated that the A10 measures in at 147 square millimeters -- substantially larger than the A9 chip it replaces. The fact that the A10 is so much larger means that, for a given unit volume, Apple will require more wafers to meet that demand. Since TSMC sells wafers, the combination of the larger chip size and the sole sourcing arrangement means that the chipmaker is likely to generate a lot more revenue from this iPhone cycle than the prior-generation one.

A packaging win, too

It is believed that in addition to handling the wafer fabrication duties, several reports suggest that the chipmaker is also providing chip-packaging services to Apple with its new Integrated Wafer Level Wan-Out, or InFO packaging technology.

The amount of incremental dollar content from this win is likely to be far less than winning all of the chip orders or the significant chip die size increase in going from the A9 to the A10, but it's additional revenue and profit dollars in TSMC's coffers. In my book, anyway, that's a "win."

TSMC has Apple, but the struggle continues

Right now, TSMC is arguably Apple's most important chip partner. TSMC has clearly done a good job developing leadership technologies and providing the right level of service that Apple requires. The chipmaker's job now will be to try to fend off Samsung and, if you believe the rumors, Intel (INTC -2.40%) for future A-series processor business.