Intel is taking a risk in building additional high end chip fabrication capacity in anticipation of demand for its chips in tablets and smartphones. As of today, this demand is zero, and as you correctly point out, Intel faces cut-throat competition in this space from well established players. Therefore, its unclear whether demand for Intel chips in tablets and smartphones will ever become significant. If it doesn't, their fabs will idle. I think this is the scenario the street fears most.
the additional high end chip fabrication capacity is for current and future demand. Your assumptions don't hold water nor would have any idea what the street 'fears' or nor. you just pull things our of your b@@