the US used to HAVE fab plants of their own
This is the point people need to acknowledge. All the major semiconductor companies - IBM, Intel, AMD, etc - did their manufacturing in the US.All those plants actually still exist, and are churning out chips today, but not the latest and greatest. Why? State-of-the-art chip manufacturing is not for the faint of heart. TSMC's current 7 nm fab cost $10 B, and the next one is estimated to cost $20 B. For comparison, AMD had a great year in 2020, with a net income of $2.4B, but that included a one-time income tax benefit of $1.3B, so more like $1.1B, which is still great for AMD, which had lost money for 15 years straight.
So, how does a company who makes $1.1B in their best year afford a $20B manufacturing plant every 10 years? It can't, math doesn't work out. AMD outsourced manufacturing to TSMC for its latest chips because it had no other choice, not because it just wanted to make a couple more bucks. Building those chips on their existing (last-generation ) production line would have been unsuccessful - too big, too much heat. And they didn't have the time or money to build a new current-gen fab.
So, how does TSMC do it? Government subsidies and indirect government support (tax breaks, low interest loans, etc.) TSMC can easily get that $20B loan and go 10 years showing little or no profit. No US company can do that. So how do we fix this? I'm not an economist or a miracle worker, but I doubt we can mass-hypnotize American investors to accept zero profit in their investments for 10 years at a time. So, off the top of my head, I'd say we need to reorganize how massive investments can be made while still showing profits. Public funding? Accelerated tax write-offs? Smarter minds than mine need to think about that.