How would advancement in ASIC manufacturing process affect mining? What's the expected performance improvement with the advanced ASICs? When advanced semiconductor manufacturing processes provide high hash rates by consuming low power, and older processes makes mass production cheaper, I'd like to know when approximately, newer ASICs will be able to make older ASICs obsolete.

Following is the semiconductor manufacturing process timeline, from wiki.


  45 nm — 2008 32 nm — 2010 22 nm — 2012 14 nm — est. 2015 10 nm — est.
  2017


http://en.m.wikipedia.org/wiki/14_nanometer
I would beg to disagree - we will see a similar effect when v2, v3, v4....vn rendentions of ASIC come around.  We will see 10X gains in Hashpower and roughly a 40% drop in power consumption.  This is all pure guesswork and speculation based on other responses I've seen and following the developments of KNC, BitFury, BFL, Avalon, and AsicMiner.  

It could be said for that matter that we are already seeing the development of v2 hardware with the advancement of the 28 nm class of ASIC Chips. 

There will likely be a cascading effect of shifting retired hardware onto other Alt-chains as difficulty increases on the other off color alt-coins such as PPC, FRC, and TRC.  

Right now using cyrptocurrency as a medium of exchange is very new...the ecosystem to spend them does not yet exist...if perhaps other services such as internet providers, mobile phone providers, insurance carriers, and other recurring cost structures will willing to adopt btc as a medium of exchange we would see the increases in usage and thus value (price)

Smaller transistors both allow more transistors to be packed on each asic chip and also require less power overall to perform the same level of hashing compared to the larger obsolete transistor size.  I have read that underclocking allows power consumption to be reduced even further - it could be that these devices see between a 30 to 65% increase in GH rates as implied by the jump between Avalon to BFL to Bitfury to KNC.