According to a report out of South Korea (via PhoneArena), Apple is said to be working on making the iPhone 7 slimmer than its predecessor, but at the same time offer up a larger battery. How does this work? For starters the removal of the headphone jack is one of the ways used to make the phone slimmer.
At the same time, Apple is also expected to employ a “fan-out” chip packaging method. What this means is that it will result in a more compact motherboard and antenna area, which in turn leaves more room for other components like extra battery, for example. Apple is also reportedly placing orders to its suppliers in Japan and other markets.
As additional “proof”, TSMC had also previously mentioned they were producing 16nm wafers with a “fan-out” design for one sole customer, and if the rumors are to be believed, TSMC is said to be the main (or possibly sole) manufacturer of Apple’s A10 chipset. Take it with a grain of salt for now but if Apple can pull it off, why not?