A report from The Electronic Times (via MacRumors) claims that contract chip manufacturer TSMC (NYSE:TSM) will be the sole manufacturer of Apple's (NASDAQ:AAPL) next generation applications processor known as the A10.

This is something that I believe, having confirmed it with a source familiar with Apple's plans back in October after Taiwan's Commercial Times first broke the story.

Where I believe The Electronic Times gets it wrong is that it claims that the A10 will be manufactured on TSMC's 10-nanometer chip manufacturing technology. There is essentially zero chance that this is true. Here's why.

Understanding when TSMC plans to go into production on 10-nanometer
TSMC has publicly said that it will begin mass production of products on its 10-nanometer technology in late 2016 and will begin to recognize revenue in the first quarter of 2017. Given that Apple is expected to launch its next generation iPhone in September (which would suggest production start in June, as the article claims), this is a complete non-starter.

Unless TSMC has dramatically pulled in its 10-nanometer schedule (something that it likely would have announced on its most recent earnings call), there is practically no chance that the A10 will be built on a 10-nanometer process.

The A10 is said to be built on TSMC 16 FinFET Plus
According to a source familiar with Apple's plans, the A10 will in fact be manufactured solely on the company's 16-nanometer FinFET Plus technology, the very same that was used to manufacture a portion of the A9 processors that made it to the marketplace inside of the iPhone 6s/6s Plus.

Although Apple won't enjoy the significant benefits that come with a new manufacturing process with the A10, the iDevice maker's chip teams should still be able to deliver some very substantial performance and power improvements by way of design/architecture enhancements.

Look for a 10-nanometer A11 and a 7-nanometer A12
Although this year Apple won't move to a new manufacturing technology, I expect that Apple will deliver something of a "one-two" punch with the A11 and A12 in the 2017 and 2018 iPhones, respectively.

The A11 should be the first Apple processor built on TSMC's 10-nanometer chip manufacturing technology -- expect this one to power the 2017 iPhone 7s. The move to 10-nanometer should enable performance improvements by way of more efficient transistors as well as the ability to pack more of them into a given chip area.

TSMC has made it clear, though, that the 10-nanometer manufacturing technology is intended to be a "short" node; much of the equipment that is put into place to support 10-nanometer production is expected to be converted over to support 7-nanometer production.

I expect that the A12 will be built on TSMC's 7-nanometer technology, which should enable both a nice boost in performance as well as room to really boost the number of transistors that Apple can pack into the chip. Since the technology is expected to go into production in the first half of 2018, it should be ready to support a broad iPhone 8/8 Plus launch in the fall of 2018.

By way of the advancements that TSMC is making in chip manufacturing technology, Apple investors should expect some very nice performance/power/functionality gains over the next couple of iPhone generations. I know that I can't wait!

Ashraf Eassa has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.