IMHO a more sustainable strategy is the government taxing the environmental and human rights externalities of off-shore production.
2. I think both e.g. US and EU should have their own chip-manufacturing infrastructure. We need more robustness at a global scale in this area.
3. Taiwan needs (and deserves) US/EU support. TSMC has turned into a geopolitical play - it seems like Taiwan feels like they need it to avoid a PRC invasion.
While this means the countries may develop slower, they will likely/hopefully wind up with less concentrated wealth (hiring more workers instead of a few people pocketing all the profits.)
I would hope that such taxes would be used towards environmental or humanitarian efforts, to be a proper 'offset' tax.
Doing so will likely result in some short term shocks, but a more sustainable society overall. My hope is that when prices would go up in such a scenario, consumers would again care about how long something lasts in big enough numbers that we have a less disposable society.
This has never been an issue in the semiconductor industry until now. Demand was always increasing and margins have been high enough to allow them to self-fund. If semiconductor companies now need subsidies to expand then we are probably past the "exponential growth" era of semiconductors. Technological gains will be much slower and much more consistent with traditional industries rather one that what we're use to.