NEW YORK (TheStreet) -- Shares of Dutch semiconductor company NXP Semiconductor (NXPI) - Get NXP Semiconductors NV Report were rising sharply Thursday as the company is benefiting from the rise of mobile payments.

Investors appear to be piling into the semiconductor company, known for its chips that work with mobile payments (near field communications), following a report from Morgan Stanley noting demand for the Apple (AAPL) - Get Apple Inc. (AAPL) Report iPhone for the June quarter is much stronger than expected.

Shares were rising 3% to $105.92 in trading Thursday afternoon.

Apple introduced its mobile payments service, Apple Pay, as part of the iPhone 6. NXP is a supplier of chips to Apple, per the company's 2015 supplier list. Other suppliers to Apple include Skyworks Solutions (SWKS) - Get Skyworks Solutions, Inc. Report, Avago Technologies (AVGO) - Get Broadcom Inc. Report, Cypress Semiconductors (CY) - Get Cypress Semiconductor Corporation Report and Qorvo (QRVO) - Get Qorvo, Inc. Report.

Here's what TheStreet's Jim Cramer said Thursday about these companies: "NXP, like SWKS, AVGO, CY and QRVO are the cutting edge semiconductors that have become 'must owns' in the chip world,"

TheStreet Recommends

Jim Cramer's charitable trust, Action Alerts PLUS, is long Apple. Get full analysis on the stock with a free trial subscription.

Morgan Stanley analyst Katy Huberty said that iPhone demand is ahead of expectations, indicating there's demand for 53 million units this quarter. She cited data from Morgan Stanley's AlphaWise Smartphone Tracker.

Huberty raised her estimate of iPhone sales numbers for the quarter to 50 million, up from 46 million, while boosting fiscal 2015 and 2016 shipment estimates to 240 million and 249 million, respectively. "We expect slight iPhone unit growth of 4% in FY16 (next iPhone cycle) as our survey earlier in the year indicates strong demand from existing iPhone users, with nearly half of the installed base planning to upgrade in FY16," Huberty wrote in a note.

Last week, research firm Bernstein initiated coverage on NXP with an "outperform" rating and a $133 price target, nearly 20% higher than where shares are currently trading.

In March, NXP and Freescale Semiconductor undefined, a maker of chips for the automotive sector, announced a $40 billion merger, with the combined company having more than $10 billion in annual revenue.