“When an earthquake occurs all in process wafers are lost. Today that's like three months worth, and before long will be four months worth.”
That’s BS and pure fiction. All the important fab tools have vibration isolation system. Taiwan is also earthquake prone. That doesn’t stop TSMC to build factories in Taiwan. Are you going to argue that TSMC isn’t cost competitive with Intel because Intel makes chips in Arizona and Oregon while TSMC makes chips mostly in earthquake prone Taiwan?
Until CHIPS act, the US and European governments weren’t providing any direct subsidy. During this time asian countries like Taiwan, Japan, and Korea were providing massive subsidies. Even China is trying that now. All these asian countries now have built an ecosystem around semiconductor supply chain. Almost all the major chemical suppliers for semiconductor equipment (ASML is a major outlier) and chemicals are from Asian countries, especially Japan. Having the whole ecosystem in close proximity makes it cheaper to produce cutting edge chips in that region. Additionally, their massive subsidies makes it an even more no brainer.
That’s exactly why TSMC and Samsung doesn’t want to produce cutting edge fab tech in US and Europe. They only want to make old gen nodes here and even that is contingent upon matching massive subsidies.
I think Intel eventually would just stop going against the flow. It just doesn’t make sense to make advance semiconductors in Europe. With the rise of energy cost and unwillingness to match or exceed Asian rivals in terms of subsidies, I don’t see how Europe can be a competitive place for cutting edge fabs. I know it’s sad but it’s the reality.