The equipment at TSMC is priceless, for China it’s not something that money can buy. Preventing TSMC from doing business with the mainland clearly violates China’s sovereignty. I would consider it an act of colonization and signal war as retaliation.
If China’s semiconductor supply chain goes down, TSMC should go down with it. In no situation would the CCP allow Taiwan to supply the US with <7nm chips while doing no business with Huawei.
Technically speaking, China is more behind on semiconductors than in jet engines.
The equipment that TSMC shipped to the China fab is for 14nm - and it is not priceless.
It is equipment that TSMC deemed outdated or commonly available to the Chinese semiconductor industry.
And SMIC is already producing 14nm chips.
Remember that in January when the new Entity List restrictions are potentially updated - it is really only Huawei and a few other companies that would be barred.
Other Chinese companies would still have access, so China's semiconductor supply chain is NOT going down overall.
Yes, China is further behind in semiconductors that in jet engines. But what point are you trying to make?