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I have a 2nd iphone 5s with touch id didnt work. Is there any way to identify whether hardware problem or software problem might cause touch id not working? thanks for advice

Do a DFU restore via iTunes and if touch ID still does not work then it’s an hardware issue. If the home button has been replaced then touch ID will not work unless you have the original home button that came with the phone and is not damaged.

does it need a software update? Is the home button the original? I have run into cases where a software update has caused the touch ID to work again after not working.