Not great for either party, but imo a particularly bad look for Intel. If they actually end up missing out on those subsidies (and imo it looks that way), then to me that puts a very big questionmark behind their whole fab business.

Even if Germany doesn’t offer the ideal conditions, getting 1/3 of a fab for free looks like a good deal to me. Advanced nodes are getting more and more capital intensive.

TSMC has a huge customer base (particularly Apple) to fund R&D. And the more capacity you have (assuming you can untilize it) the more you can spread out those investment costs.

Intel so far has to shoulder those costs all by themselves. I know they are opening up to outside customers, but those still have to be aquired first and also convinced that there is no conflict of interest. So willingly leaving such a huge chunk on money on the wayside in their situation looks like a bad move. Unless ofc they simply can’t afford the rest, but that would be even worse.