It's a small fab compared to the ones in Taiwan and by the time it's completed 5nm won't be their latest process.

And there is no guarantee that it will ever be, if the promised subsidies will not materialise.

It probably will materialize. Reading between the lines, the DoD wants close to leading edge fabs on US soil where they can better (in their minds) verify the physical security of what's being manufactured, and is willing to pay absurd amounts of money to make that happen.

Absolutely, Arizona plant is a contingency facility TSMC plants in Taiwan lie within the range of Chinese missiles. It is important for US to not be completely blocked in case of a War. So it is certain it would be built and perhaps in record time looking at the current economic environment.

The yearly budget of the DoD is more than twice TSMC's market cap, and the US and Taiwan are important strategic allies. The DoD has wised up to the strategic need to maintain advanced fabs in the US and is going to pay what it costs to make it happen.