Great analysis!
What are your thoughts about this:
Just two days after Russia recognized DNR/LNR independence and sent Russian peacekeepers to occupy DNR/LNR, Joe Biden announced a US ban on all trade and investment with Russian-occupied DNR/LNR territories. In some ways, it's mute since DNR/LNR is wartorn land with little-to-zero economic activity with US, but in other ways, it is most similar to the Xinjiang cotton bans. The Xinjiang cotton ban was (for better or worse) attempt to devoid all Xinjiang of economic growth in order to maintain low-economic activity, foment civilian discontent and ultimately instigate rebellion long-term.
I can totally see US giving Chinese-occupied Taiwan the Xinjiang cotton ban treatment, but instead on high technology. Meaning US will cut off all trade and investment with TSMC if China occupied Taiwan, with hope of depriving Taiwanese tech of Western market to drive it into poverty and foment rebellion against China occupation. US would be hurting itself in the process, but justified with national security and punishing Taiwan to punish China. Not saying it will deter China, but just saying that US is likely going to use Xinjiang cotton ban as template for occupied Taiwan.
Assuming TSMC and other important industries on Taiwan somehow avoid getting bombed over the course of an armed reunification, and remain operational afterwards, I think it's very unlikely that there will be a serious effort to boycott TSMC.
The US was happy to ban Xinjiang cotton because while it was good cotton, it's not like it was the only place in the world that produced cotton. The people in the states weren't going to suddenly be unable to buy new clothes and freeze to death in the winter, either (although it still happened, in Texas of all places). This move impacted China more than it did the US, which is why the US was willing to go through with it.
If the PRC were able to reunify, there's not a chance in hell they aren't going to reverse engineer every last scrap of TSMC technology they get their hands on to pass onto their own domestic manufacturers. So if the US wants something to actually happen with such a ban, it would presumably include other Chinese manufacturers as well. It would be incredibly hard for the US to replace this source of chips (TSMC + existing Chinese ones) in the short to medium term, which if my google search is correct, represents over half of global chip production. Not only is it hard to replace, it's also very hard for the US to go without a steady supply of chips. Think about the chip/semiconductor shortage last year, its effects on the US economy, and now imagine if the US decided to just ban over half of the already insufficient supply. Sure, the present US may already manufacture enough domestically to keep its military and government running, but you try telling the people that they can't get their new 3090ti gpus because uncle Joe wanted some international clout, they'll get pretty angry.
Finally, any reverse engineering of TSMC tech would place China at the cutting edge of chip R&D, which would only further increase the demand for Chinese chips. If the US really goes through with such a ban, there will be plenty of other new countries lining up to buy from China. The only way for such an embargo to have a noticeable effect on China is if the US were somehow able to convince its allies and vassals to also boycott Chinese electronics and cripple their economies. To that, all I have to say is good luck.