(Bloomberg) -- The appearance of SiTime Corp. components in the new iPhone 16e is fueling a stock rally for the little-known chipmaker, sending the shares up 20% on Wednesday.

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A device teardown of the smartphone by TechInsights revealed the existence of timer chips from SiTime, a maker of clock components that had about $200 million in revenue last year.

SiTime Chief Executive Officer Rajesh Vashist discussed the arrangement during a Morgan Stanley event Tuesday, indicating that his company “has a couple of chips in there.”

The chipmaker uses silicon parts — what are known as microelectronic mechanical systems — to replace the traditional quartz oscillators that keep time in devices. SiTime sees a huge potential market for this precision-timing technology, which can go into everything from cars to military navigation systems.

“Timing is a heartbeat of electronics,” Vashist said during the presentation. “Our thesis was that the quartz had done great, but it needed to be disrupted through semiconductor technology.”

The iPhone change is part of a broader shift in the device’s inner workings. The new 16e model is the first to include an Apple-designed custom modem chip, called the C1. That part is due to appear in more iPhones later this year — a transition away from Qualcomm Inc. components.

Apple has touted the energy efficiency of its new modem, which connects the device to cellular networks. It didn’t discuss SiTime during the iPhone 16e launch last month.

TechInsights estimates that the cost per SiTime part in each phone is about 50 cents. SiTime sells its components through distributors like Pernas Electronics Co. and Quantek Technology Corp., according to regulatory filings.

“Based on the sell-through information provided to us from distributors who identify end customers, we believe that the majority of our products sold to Pernas and Quantek are in turn incorporated into products of Apple Inc., our largest end customer,” the company said in its annual report last month. Apple accounts for about 22% of revenue, SiTime said.

Cupertino, California-based Apple didn’t immediately respond to a request for comment.

SiTime shares rose to $182.19 on Wednesday, marking their biggest single-day gain since May. The Santa Clara, California-based company held its initial public offering in 2019.

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(Updates share reaction in first paragraph.)

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