Taiwan's economy is deeply dependent on TSMC. By preventing TSMC from selling to the mainland while encouraging subsidies for TSMC's competitors in other countries the US is really squeezing Taiwan with unclear long-term consequences.
It is potentially a lot of jobs and economic activity leaving Taiwan for the US, Europe or Japan.
Most of the US subsidies are going to Intel (including for them setting up their foundry services which directly competes with TSMC). However there are some for TSMC for setting up in the US, that is true.
Taiwan can be economically squeezed by western derisking and moving sensitive tech out of Taiwan or it can continue to be militarily squeezed by China if it continues to be the single point of failure in the western technology chain. The former appears to be the better choice than the latter.
