I think that only works when there is other capacity available. If Intel was suddenly the only fab available to western companies but they refused to fab AMD chips I suspect that would result in intervention.
Not so sure. AMD is always free to build a fab to make their own chips. It's perfectly reasonable to refuse to serve a direct competitor...or offer the service at a huge expense that would make it unreasonable for the competitor.
'AMD is always free to build a fab to make their own chips.'
By that logic there us no limits on a monopoly abusing its power, after all you are always free to create your own water supply company, electric distribution company, etc.