There aren't really subsidies for TSMC here in Taiwan. I would say labor cost is relatively cheap (compared to western countries), and security is relatively hi

There aren't really subsidies for TSMC here in Taiwan. I would say labor cost is relatively cheap (compared to western countries), and security is relatively high (compared to the Chinese ecosystem). A big reason it happened here is probably more to do with how manufacturers started combating intellectual property theft decades ago. Firms who wanted to manufacture in China manufactured a few key components in Taiwan to maintain control over output, then shipped them to Guangzhou for final assembly. I'm not sure there's a "secret sauce". It's more they quietly built a decade plus lead on their closest competitors when they were in the "less desirable market" (compared to Intel, AMD, and Nvidia), and there are huge barriers to entry, with little short-term incentive to DIY (vs. contract manufacturing). TSMC is actually now Taiwan's single biggest energy consumer, using about 5% of the entire country's electrical supply.