Tablets and smartphones are using chips made using TSMC's 28-nm process, and 16-nm chips could conceivably reach mobile devices sometime next year or in 2015, said Nathan Brookwood, principal analyst at Insight 64.
"The reason they pulled this in is because Intel has been touting FinFET for a while," Brookwood said, adding that TSMC had to move quickly to catch up to Intel's 14-nm technology.
Companies typically send in chip designs to manufacturers like TSMC, who make the silicon and send it to chip makers for testing. Once design issues are resolved and volume manufacturing starts, it could be three to six months or longer for chips to reach devices.
TSMC in the past has had trouble ramping up new manufacturing technologies, notably with the 28-nm process, which is now stable. Qualcomm last April blamed TSMC's inefficiencies for a shortage of the Snapdragon S4 mobile chips, which were in heavy demand at the time.
But testing of 16-nm chips has so far been progressing well, Chang said.
Beyond TSMC, another contract chip manufacturer looking to take an early jump from 20-nm to the next manufacturing node is GlobalFoundries, which moved to the 14-nm process in 2014. GlobalFoundries makes chips based on x86 and ARM processor designs, and also graphics processors.
But there is a difference in the manufacturing technology implementations used by Intel, TSMC and GlobalFoundries, Brookwood said.
Intel is shrinking the transistor as it moves to 14 nanometers. TSMC and GlobalFoundries are not making big changes in transistor size as they move to the 16-nm process, but just moving from a flat to a 3D structure, Brookwood said.
TSMC reported a first-quarter net profit of NT$39.6 billion (US$1.3 billion), up from NT$33.5 billion compared to the same quarter a year ago. The company reported revenue of NT$132.8 billion, increasing by 25.7 percent year over year. Chang attributed growing smartphone and tablet sales for the revenue boost.