In a previous article, I had speculated that Apple (AAPL -0.81%) could conceivably equip its upcoming 6.1-inch LCD iPhone with the same A11 Bionic processor that's found inside of the current iPhone 8, iPhone 8 Plus, and iPhone X smartphones. 

However, that speculation seemed to be called into question by a report published by generally reliable analyst Ming-Chi Kuo with KGI Securities.

Apple's low-cost iPhone SE lineup.

Image source: Apple.

Thanks to some new information from key Apple chip manufacturing partner Taiwan Semiconductor Manufacturing Company (TSM -0.55%), it's now a virtual certainty that all of the iPhones Apple introduced in the fall of 2018 will, indeed, use Apple's upcoming A12 processor. 

Reading the tea leaves

Apple's upcoming A12 processor is expected to be manufactured using TSMC's upcoming 7-nanometer technology. TSMC says that its 7-nanometer technology offers significant performance, power efficiency, and chip area benefits compared to the 10-nanometer technology that's used to build the current A11 Bionic chips. 

TSMC co-CEO C.C. Wei said on the company's Jan. 18 earnings conference call that he expects the revenue contribution from sales of 7-nanometer wafers would be about 10% for the entirety of 2018. 

Now, considering that TSMC executives also indicated on the call that mass production of chips using its 7-nanometer technology wouldn't begin until the second quarter of the year (TSMC Chairman Morris Chang said that production would begin in June 2018), it's likely that any significant revenue contribution from 7-nanometer chip shipments won't show up until the third quarter of 2018. 

For 7-nanometer chip shipments to make up 10% of the company's full-year revenue in 2018, especially considering that this contribution will be about 0% in the first half of the year, TSMC has to be expecting a huge increase in 7-nanometer shipments as a percentage of its total sales during the second half of 2018. 

That increase would essentially have to come from 7-nanometer shipments growing significantly in the second half of 2018 and shipments of 10-nanometer technology moderating during that time. 

According to Kuo, roughly half of the shipments of the iPhones that Apple intends to launch this year will be of the 6.1-inch LCD model. If that phone were equipped with Apple's A11 Bionic processor (which, again, is built using TSMC's 10-nanometer technology), then it'd be very difficult -- indeed, probably impossible -- for TSMC to generate roughly the same revenue from 7-nanometer chip shipments in 2018 as it did from 10-nanometer chip shipments in 2017. 

In fact, since TSMC expects its total revenue to grow between 10% and 15% in 2018, revenue from 7-nanometer wafer shipments in 2018 would need to exceed the revenue that TSMC saw from 10-nanometer wafer shipments during 2017. 

It's now plain as day that Apple's upcoming 6.1-inch LCD iPhone will include the same A12 processor that'll power the higher-end models with more advanced organic light-emitting diode (OLED) displays. Apple clearly views the 6.1-inch LCD iPhone as an important product that deserves to be equipped with the best chip technology that the company can muster.