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No, not necessarily, but it can cause a minor issue. iPhones use a Lithium-Ion battery for its power, using while it's charging won't necessarily ruin the battery, but if you're using the phone while the battery is in the charging process, it can cause the phone to think it has more power than it actually has.
Since the only problem with the IC is it canât charge the battery then that tells me the charging portion of the IC burned out. If the circuit received too much usb voltage/current then the phone would not turn on. The iPhone 5 has been on the market since September 2012.