If I want to migrate to 16 bit microcontroler from the 8051, which one would you advise.

If you want to be '51 compatible, there is, in my opinion, only one choice: the Philips XA.

However, were I to migrate a '51 project to 'more bits' I would go with the ARM. ARM controllers from e.g. Philips are almost cheaper then '51s. Another advantage here is that again you will have an architecture with a myriad of derivatives. Not to mention that if you get shorted by a supplier, there is always another brand. When making projects with e.g. Cygnal - which lock me to one supplier - I always make sure I can do the same (with a different board layout) with other chips. As an example, my current project exist in one fullly debugged version with a Cygnal f126 and in a 'paper version' with a Dallas and CPLD. When a miracle hjappens, and I have time, I might redo this one for an ARM as backup instead of the Dallas.

Erik