This will make it harder for them to invest in production technology, which will make it harder for them to catch up to TSMC. It might be the only move they can make, but that doesn't make it a great one.
https://www.macrotrends.net/stocks/charts/INTC/intel/cash-on...
Intel dropping their prices and thus revenue temporarily should not affect their ability to compete at all. They're not THAT badly mismanaged to the point they're out of cash.
Intel's per chip profit may drop, but if they sell more because of lower prices, they may actually increase their overall profit.
It is really hard to tell without knowing Intel's current profit margin and the increase in number of chips sold from this maneuver (if any).
And for future investment Intel still has ~ $24 billion cash on hand as of June 2021 [0]
[0] https://www.macrotrends.net/stocks/charts/INTC/intel/cash-on...
Shouldn't you replace AMD with TSMC in that sentence, unless you meant design instead of chips? AMD doesn't manufacture chips.
Intel has clearly failed with regards to manufacturing new nodes, but is the chip design really that bad when they could compete for a long time with a large node disadvantage?
As a simple consumer, I perhaps don't know about their upstream suppliers (granted the HN crowd will absolutely know...).
Intel is unusual in that they still manufacture their high end chips in house, cutting edge fabs are simply mind boggling expensive. So basically everyone else outsources and if your outsourcing high end chips you might as well buy from the bets if you can.
Nevertheless, the AMD designers must be praised for making the right design choices year after year for the last half of decade, which were needed to fully exploit the characteristics of the modern CMOS processes.
On the other hand the Intel designers appear to have lived in a fantasy land, where they had absolutely no idea about how their future manufacturing processes will behave, even if in their case the required information should have come from another division of the same company, not from different foundry companies, like in the case of AMD.
Once again, Intel was not able to switch in time their style of design, to be in sync with the advance of CMOS technology.
During 2003 - 2008, Intel needed 5 years to follow AMD and switch to CPUs with integrated memory controllers and now, during 2016 - 2021, Intel required again 5 years to follow AMD in the transition to the use of multiple interconnected chiplets instead of large monolithic chips.