Apple supplier AMS has beaten expectations with a 41% jump in third-quarter revenue today.
The company also forecast further strong demand for its optical sensors from smartphone makers as it takes aim at a takeover of German lighting maker Osram.
Revenue of $645m topped its own forecast of $610-640m and AMS said it expected a figure of $610-$650 million in the fourth quarter.
Its adjusted EBIT margin was 28% and AMS said it expected to at least maintain this level in the fourth quarter.
Operating cash flow increased more than threefold to $299m, and AMS's backlog stood at $253.1m at the end of September.
AMS's main revenue source is optical sensors and Apple, its top customer, uses the Austrian firm's 3D facial recognition technology in its latest iPhones.
Apple accounts for around 40% of group revenue, analysts estimate.
CEO Alexander Everke's next aim is a takeover of Osram to combine AMS's expertise in sensors with the German firm's lighting know-how.
Everke's first attempt failed this month as AMS secured 51.6% support from Osram shareholders, short of the required 62.5%.
Under a new bid, its offer price stays at 41 euros per share, valuing Osram at €4.6 billion, but with a lowered acceptance rate of 55%.
Private equity groups Bain and Advent informed Osram on Friday that they would refrain from a takeover bid for the time being, and AMS hopes that will convince investors to tender their shares.
But sources familiar with the groups' thinking told Reuters on Sunday that they were waiting in the wings and could revive their approach if AMS's bid failed.
AMS plans to take on billions of new debt to take over Osram.
AMS "feels confident about the new takeover offer for Osram as it is financially attractive, strategically compelling and the viable option for Osram shareholders," the company said.
Subject to the German financial watchdog Bafin's approval, the offer period is expected to begin this month, AMS said.
Last year the company was hit by production delays and initially slow demand for Apple's iPhone X series last year.
But this year has been positive with iPhone 11 models and higher demand from Android phone makers including Samsung and China's Xiaomi and Huawei.