Not necessarily, I actually think this is a smart move on their part, TSMC is ahead on 7nm and FD-SOI, RF, SiGe, etc. are big, profitable and rapidly growing markets in which GF has a differential advantage.
Agree this a smart move. They should be targeting lower volume markets where the 30% decrease in per-die cost at 7nm isn't offset by the increased upfront costs. If they focus instead on decreasing fixed costs of lower volume ASICs, they will have competitive advantage in long-tail markets.
And maybe, if they will push their resources really hard on decreasing costs of lower volume ASICs, that would be a big win over GF in long term. It depends on progress in hardware synthesis tools and software mainly. If the tools like auto-generating optimized RTL from Haskell code would became mainstream, and cost for production of custom, reasonably small ASICs on modern fab processes drop by an orders of magnitude - we would get something similar to what happened to PCB recently, when there is no point to made it by yourself even if you need a dozen, just send gerber files to OSH Park, and get your PCBs for $5 in two days.
