They may only be rumours but the longer this is delayed the more it is likely. The hangmans axe may be at the top but its moving slowly down. It must be costing them money in not getting it released and the PR is not good I wouldnt be surprised if this all comes to nothing. If thats a sample of the card going into volume production it looks awful like the outer casing is made out of thin bendy black plastic.
Would it matter if it was? The outer casing of a graphics card shouldn't be under any significant physical load.
I think Intel will dribble small quantities of Alchemist out. It's not competitive and they know it. But I don't think Intel will cancel Arc. I think Intel are committed to the architecture for the future. There's a big market for a massively parallel processor architecture and Arc is Intel's go at it. Their first swing has missed, but they're going to have to go to bat again. They can't keep selling x86 and nothing else and remain in the top tier forever. I think they'll try to learn from Alchemist and try to keep the Arc name kind of known and have another go with Battlemage. Hopefully they'll have realised in time that drivers matter and a last minute under-resourced cobbled together rewrite of notoriously bad iGPU drivers really doesn't cut it for dGPUs.