TSMC's Arizona fab is slated to start 5nm production in 2024. TSMC announced high volume 3nm production, by their Taiwan fabs, by the end of 2022.

TSMC isn't giving up their cutting edge technology, just what will be considered an old node size by 2024.

By the time the fab is done 5nm won't be cutting edge anymore.

It will be if China invades Taiwan. They will not be able to keep the TSMC facility in business for very long, assuming it survives the attack to begin with.

Where life will get interesting is in South Korea, at the Samsung fab. They will have the only 3-nm process in the world if TSMC goes away.

I'd assume TSMC chose the practical optimum there: given current events, having all leading fans physically in Taiwan was no longer a tenable option.

So they re-balanced for a volume play.

If some (read: national security volume) fabs in EU / US are enough to assuage governments, but most (read: global economically important volume) are still in Taiwan, then that's the next best thing.