By Stephen Nellis

SANTA CLARA, California (Reuters) -Taiwan Semiconductor Manufacturing Co said on Wednesday that a new chip manufacturing technology called "A16" will enter production in the second half of 2026, setting up a showdown with longtime rival Intel (NASDAQ:INTC) over who can make the world's fastest chips.

TSMC, the world's biggest contract manufacturer of advanced computing chips and a key supplier to Nvidia (NASDAQ:NVDA) and Apple (NASDAQ:AAPL), announced the news at a conference in Santa Clara, California, where TSMC executives said that makers of AI chips will likely be the first adopters of the technology rather than a smartphone maker.

Analysts told Reuters that the technologies announced on Wednesday could call into question Intel's claims in February that it will overtake TSMC in making the world's fastest computing chips with a new technology Intel calls "14A."

Kevin Zhang, TSMC's senior vice president of business development, told reporters that the company has developed its new A16 chipmaking process faster than expected because of demand from AI chip firms, without naming specific customers.

AI chip firms "really want to optimize their designs to get every ounce of performance we have," Zhang said.

Zhang said that TSMC does not believe it needs to use a ASML (AS:ASML)'s new "High NA EUV" lithography tool machines to build the A16 chips. Intel last week revealed that it plans to be the first to use the machines, which can cost $373 million each, to develop its 14A chip.

TSMC also revealed a new technology for suppling power to computer chips from the backside of the chip, which helps speed up AI chips and will be available in 2026.

Intel has announced a similar technology intended to be one of its primary competitive advantages.

Analysts said the announcements called into question Intel's claims that it will retake the world chipmaking crown.

"It's debatable, but on some metrics, I don't think they're ahead," Dan Hutcheson, vice chair at analyst firm TechInsights, said of Intel.

But Kevin Krewell, a principal at TIRIAS Research, cautioned that both Intel and TSMC's technologies remain years away from delivering the technology and will need to prove that real chips match their keynote presentations.