Foundry-for-hire TSMC announced the start of 28nm production on Monday and it appears the first chips will end up in AMD and Nvidia graphics cards.

TSMC claims it already has more than 80 tapeouts planed for the new process, a significant increase over the previous 40nm transition. So what’s different this time around? Mobile chips are the simple answer, as demand for ARM based processors continues to grow.

Both AMD and Nvidia hope to transition to 28nm over the next few months and AMD will lead the way. However, most analysts don’t expect availability until next year, so both AMD and Nvidia will refresh their graphics lineups in Q1, with some cards possibly coming in Q2. The past year was hardly an eventful one for the graphics industry, so both companies are quite eager to jump the 28nm bandwagon.

As for the mobile crowd, quite a few companies have 28nm chips in the pipeline, including high performance quad-core chips that will appear in mid 2012.