I agree, and I think the government’s incentive might also be a having strategic production capability in the US. Maybe they’re concerned about TSMC’s future with the tension between China and Taiwan?
That's all fine, but this is definitely heading into socialist territory. I guess they're out of ideas and this is how they incentivize. The free markets have failed?
My hypothesis is that this is government response (own stake in Intel) to another government’s action (hint take over of Taiwan) and as such is outside the free market. But I have no evidence to support it, it’s just an opinion and it could be that they view Intel as “too big to fail” or something like that as you suggest.
