I think the big issues for Intel will be avoiding getting into a vicious circle of uncompetitive performance -> lower margins -> less investment in process /fabs -> uncompetitive performance
In part AMD broke out of this by using TSMC, but Intel relying on (not just using) TSMC would be a huge step.
I bet there will be enough interest in keeping a top-tier fab facility and expertise on the US soil. If I were DoD, I would be very interested, for instance.
You can go with larger nodes and larger power budgets for avionics and other electronic stuff in battlefield machines.
OTOH you'd rather be top-notch in your communication equipment, low-power sensors for reconnaissance, etc. In some areas, having a US-controlled 7 nm fab may matter even for DoD.
I personally expect those plans to be dropped or cut back relatively soon as Trump leaves office. I don't think the 2024 date for this plan was at all a coincidence. Taiwan is extremely shifty about their semiconductor tech leaving the island. Of course, 5nm would be very outdated by then either way.
In part AMD broke out of this by using TSMC, but Intel relying on (not just using) TSMC would be a huge step.