(Bloomberg) -- Taiwan Semiconductor Manufacturing Co., the primary chip supplier to Apple Inc., reported a better-than-projected profit after the latest iPhones proved a hit with consumers.

The world’s largest contract chipmaker reported net income of NT$101.1 billion ($3.3 billion) in the quarter ended September, compared with the average analysts’ estimate of NT$96.2 billion. Revenue was NT$293 billion according to previously reported sales data.

TSMC, the main chipmaking partner to Apple and China’s Huawei Technologies Co., is benefiting from reinvigorated smartphone sales. Lower prices and aging handsets are helping drive demand for the iPhone 11 range, and Apple is said to be asking its assemblers to target the high end of an original forecast for 70 million to 75 million unit shipments in 2019.

Read more: Apple’s Lower Prices, Users’ Aging Handsets Drive IPhone Demand

TSMC and its industry peers have grappled with a plateauing smartphone market, efforts by top customer Apple to move beyond hardware, and U.S. tech-export curbs on No. 2 customer Huawei. But investors are growing more confident that the latest iPhones are firing up consumers. TSMC is in fact straining against capacity constraints in the current quarter, Sanford C. Bernstein analyst Mark Li said.

The “iPhone is driving stronger near-term demand. We believe the competitive pricing of iPhone 11 is garnering good traction and has prompted Apple to place more orders at the supply chain,” Li said in an Oct. 10 note.

Shares of TSMC climbed to a record in October on optimism over the latest iPhones. They closed about 1% lower ahead of the earnings report.

To contact the reporter on this story: Debby Wu in Taipei at dwu278@bloomberg.net

To contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Peter Elstrom

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