The US government might be aware that relying on overseas production with Taiwan exposes the country to risks and while it may not be economically ideal for TSMC to set up shop in the US as you pointed out, US workers cost a lot and expect cushier working conditions than taiwanese workers, they may have seen it as a necessary move to secure a long term advantage and ensure they’re on the right side of political interests.
As for the economic viability of these fabs, you’re right that they might not be profitable in the short term, but in the greater scheme, companies like TSMC might not necessarily be focusing purely on the bottom line. The US incentives likely made it a more viable decision for them to invest in these facilities, and theres always the possibility that TSMC could leverage these fabs for further r&d, partnerships with US companies, and some market dominance.
The chips act could be seen as a form of subsidy not just for Intel, but for the broader ecosystem. Yes, there are aspects of it that might look like a bailout for domestic companies, (it isnt like the government hasnt bailed out big companies before..like Banks, GM, Chrysler, etc) but there’s also the bigger goal of bolstering US production capacity for critical technologies. This is something that a lot of other countries have been doing for years, so it's not surprising the US is finally jumping on the bandwagon.
And you’re right about the costs being "nothing" in the grand scheme of the federal budget. For a trillion dollar budget, $50 billion is just a drop in the bucket. But when it comes to national security and securing future technological dominance, that drop might be more valuable than we think.
In the end, while TSMC may have all the power in this specific situation, they’re also positioning themselves in a way that aligns with both the US and their own long term strategy.
