Customers face significant risk and leverage constraints from TSMC that will slow Intel's ability to win meaningful foundry business despite government backing.

"For large chip design companies in a tight market, committing to Intel involves not only heavy investment but the risk of upsetting TSMC, whose precious capacity they still need. 'People don't want to piss off TSMC because there is a capacity crunch,' says one company insider. 'Everyone is in a fight for wafers, and that gives TSMC a tremendous amount of leverage.'"