It looks like Intel has confirmed that their 7nm CPUs won't ship until 2022, and the only 7nm parts in 2021 will be their new GPUs. This confirms what many of us had suspected about Intel's roadmap.
It also confirms why Apple had to go with a larger design for the 16". Intel's 10nm process does not offer clear advantages over the existing 14nm++ process, and 7nm is a ways away. It's really too bad, but there's nothing available in the near term that could work for a slimmer chassis.
I hope Apple does start working with AMD this year on the CPU-side and gets a head start on working through the chip's power management issues, because the most optimistic thing on the horizon is AMD's Zen 4. That could be arriving as soon as 2021 on TSMC's 5nm process, and it's still early enough for AMD and Apple to begin working together to have a semicustom part ready for Apple at launch.
It's a leap to assume that the size is because of the chip fab size and thermals. A leap too far, really. The size is really quite nice and gives you a ton of battery power and therefore battery life. Apple has a super lightweight offering that's doing quite fine, so there's no reason to make the large laptop thinner/lighter.
The false equivalence between marketing numbers for fab processes and performance is a bit tiresome.