TLDR: Because companies don't play geo-politics, they only care about low manufacturing costs and profits. It's only now that the US and other Western governments are getting involved that chip manufacturing is finally getting spread to other countries. Because Governments are the ones that worry about geo-politics and supply chain problems caused by rampant outsourcing.

In 1976 the Taiwanese government convinced RCA to transfer semiconductor manufacturing to Taiwan. Since then the semi conductor business in Taiwan has only grown and now upwards of 50% of chip manufacturing on the planet happens on that one island.

Taiwan has the advantage that it has the expertise in-house (lots of people with experience and training to make chips) and can do so at a much lower cost of labor compared to the US and other Western countries.

Similarly 60-70% of the worlds hard drives are also manufactured in Taiwan in 3 factories that are side-by-side in a tsunami/typhoon zone.

The next largest chip foundry is Samsung's which is in South Korea.

Meanwhile Intel and Texas Instruments still manufacture chips on-shore in the US. But while Intel's chips are critical to the PC industry, smart phones, automotive and a lot of other industries are heavily reliant on South Korea and Taiwan for their components and assembly.

It's kindof of shocking to be honest that Western Governments didn't take notice of the weakness of manufacturing industries heavy reliance on potentially unstable countries until recently.

The US Government has also been forced to step-in and stop the sale of US based telecom and electronics companies to the likes of Broadcom because of their Chinese backing.

Decades of outsourcing has lead the US in particular to be heavily reliant on countries like China and Taiwan for things like electronics. Even the Japanese which were historically an electronic manufacturing powerhouse are now reliant on other countries for chips because manufacturing them onshore is too expensive.

Meanwhile Russia is reportedly scrambling to buy black market chips because they too are heavily reliant on the West for electronics, and due to sanctions can't buy enough parts to maintain their own infrastructure or build modern military hardware.

Due to geo-political issues between Taiwan and China, and problems caused by the pandemic, Samsung is now building a new chip foundry in Texas which should be operational in 2024.