[arnd]

I think you get into practical problems at some point. WikiChip lists a 28nm Cortex-A7 core at 0.48mm², with every node shrink (20nm, 14nm, 10nm, 7nm, ...) you can halve that, but adding 64-bit support to a core might only add about 10%.

You can't make chips arbitrarily small, because you end up wasting more of your wafer for the area between the dies and for the wire bond pads. If the chip size stays the same but the CPU gets smaller, most of the chip is for off-core components and the CPU has less impact on the total cost and power consumption.

You could use more complex CPU cores, or simply more cores, for better performance, but then you also need a faster memory interface (wider buses, LD-DDR4+ instead of DDR3, ...) to make actually use of the performance. These lead to higher memory capacity as well, but then you can't actually use the available memory as you run into 32-bit addressing limits.

I wouldn't rule out shrinks of existing 32-bit SoC families to 22nm or below to lower cost once those processes get cheap enough and there is still demand for compatibility, but there is a good chance that 28nm SoCs is where 32-bit ends. (note that I'm not talking about the dozen or so additional ARC/Xtensa/RV32/Cortex-M/... microcontroller cores on high-end SoCs, as those are not the ones running Linux).