TSMC building Megafabs outside Taiwan would not reduce the strategic vulnerability much. There is so much other supply chain infrastructure and industry services in Taiwan that chip production would halt even in foreign TSMC fabs.

That said, Taiwan should do everything in it's power to keep Megafabs in Taiwan and raise stakes. As we have seen in Ukraine, economy is more important than protecting values. The US tells Ukraine that it can't attack Russian oil exports because global oil price would raise.