The more credible speculation I've seen (although arguably once you're arguing with speculation is more credible, you've already lost) is that Intel is doing a multiyear deal to have TSMC crank out its discrete Xe graphics/compute cards. Which frankly makes a lot more sense, they need a leading process to compete with NVidia who currently has access to Samsung's 7nm and AMD who has TSMC's 7nm and will probably move on to TSMC 5nm sometime next year as Apple moves on to TSMC 3nm.

So supposedly Intel is guaranteeing enough Xe business to get TSMC to convert part of its Baoshan complex over to making Xe. Intel will keep trying to fix its own fabs for its CPUs and probably intends to bring Xe cards back in house at a later date, but they also want to go challenge AMD and nVidia for datacenter GPUs now and that means getting access to a better process.

Outsourcing the commodity i3 whose main goal in life is run MS Office on a Dell Optiplex is definitely a strange rumor. Out of all the things Intel has, that's the area that has the least need of a process upgrade.