You're literally claiming their financial is in shambles over them spending 1 mill?

What you're missing here is that TSM bought 1 million FTT, and not just spending $1 million. Looking at the price back then, 1 token is around $50 so TSM spent roughly $50 million buying the token in return for $210 million 10-year sponsorship from FTX. If the deal is flat $21 million per year, that means TSM lost $29 million due to FTX's bankruptcy on top of missing close to $200 million future revenue.

Whether losing that much money is enough to completely ruin TSM's finances or not, that's a different story. But it wouldn't be insignificant because what TSM lost is liquid money while the company doesn't actually produce a lot of liquid profit in return.