According to Nikkei Asian Review, TSMC announced the new $15.7 billion facility a day after Taiwan's minister of science and technology, Yang Hung-duen, told local media about it. His ministry might select a site in Kaohsiung for the factory, which could start production as early as 2022.

That gives TSMC's competitors a few years' breathing room, but the race to smaller and smaller chips continues. While Intel claims it will produce a 10nm processor before its competitors, it conceded that production facilities equipped to pump out increasingly-smaller chips will only get more expensive. That's why the company is slowing its two-year cycle "tick-tock" innovation cycle to reduce chip size every three years instead, focusing instead of improving internal architecture and performance in the interim.

But even that lead might not be enough: On a conference call back in January, TSMC said it has a plan to push out 7nm chips by 2017 and 5nm by 2020.