They are purchasing fab time from TSMC right now because of the failure to produce 10nm for years but both sides are saying that it's only a temporary thing.

Now if you're talking about in the future, the biggest hurdle is going to be Apple and AMD since they got there first and already have contracts for specific amounts of fab time/wafers. Intel coming in now is basically only able to take whatever table scraps are left.

Intel is likely planning to purchase some fab capacity from TMSC already: https://www.cnbc.com/2020/07/27/tsmc-shares-jump-as-intel-fa...

"…U.S. chipmaker Intel said it faces delays for its next-generation chips and could outsource some of the production.…While Intel didn’t name potential third parties, analysts see TSMC as being a contender."

Margins and as many wafers as they want, eventually. If they can get their 7nm process working they will have a lower cost and higher capacity than their competitors since TSMC does exist to make money and other companies want their advanced nodes too.

Also there's a reason Intel's 14nm chips can compete with AMD's 7nm chips. Manufacturing and design working together has advantages of its own.

Finally it seems like they plan to make some chips at TSMC.

Main problem is that Majority of TSMC's capacity is already reserved by Apple, Qualcomm, and AMD who have been longstanding customers. Another issues is that TSMC is a fab competitor so they have little incentive to keep Intel competitive. So if you are intel you have no real options to go mostly external if you want to maintain the volume you have delivered in the past.

Intel produces military grade CPU's too, which probably cannot be produces overseas.

In addition to the points raised by others, there would most likely be significant work (dozens of engineers, several months) needed to re-target their designs to TSMC’s process —- so some opportunity and actual costs.

intel already announced that Xe GPUs will be made at "an external fab" (which everyone believes to be TSMC).

https://www.anandtech.com/show/15974/intels-xehpg-gpu-unveil...