Stratechery is usually very clever, but here misses a key point: Intel falling behind in node size is the problem, yet TSMC is not a direct competitor to Intel. Sure, TSMC competes against the new Intel foundry initiative, but foundry is not the main profit center. For the most part, it's the companies that buy TSMC's fab time that are competing with Intel.

So sure, Intel buying TSMC time helps TSMC. However, TSMC would have sold that fab time anyway, and gotten the same scale fabbing (say) AMD chips. It's much more useful for Intel to buy production and hurt the actual Intel competitors* that would have contracted for that TSMC time while still making profits for Intel.

Intel will still have enough scale to still grow its own processes, and it can probably rely on some help from Uncle Sam to further tilt the scales.

I'm frankly surprised that regulators haven't interfered - in most other markets people would have noticed the anti-competitive move (a manufacturer 'starving' their competitors' supply).

* Apple excepted, since they have more than enough cash to outbid Intel. Then again, Apple doesn't bother with servers, so Intel can live with this. Also, the Apple ecosystem is different enough that switching has its own complex set of upsides and downsides.