On top of that, once China ramps up domestic chip production it will become direct competition for western companies on the global market. So in addition to losing the huge market in China, they will now have competition in the remaining market as well.

with the bonus third whammy being that under this context of push coming to.shove, China would reintegrate Taiwan seizing control of basically the entire global chain of production

Which is why the US has forced Taiwanese companies to reshore in the US and elsewhere to their detriment. So that in say 2-3 years those fabs (and others in say the zionist colony) will be close enough to meeting the needs of the US and parts of western Europe that they can pull the trigger on Taiwan independence and bomb the foundries from the deep ocean leaving China nothing but rubble and some indoctrinated compatriots of theirs who will fight them and cause Europe to do a decoupling in the name of “the garden” and “standing with democracy” as well as creating a propaganda groundswell of anti-China fervor much like the anti-Russian fervor we see now over Ukraine but probably more sustained given how much more nurtured anti-Sino hate is.

It won’t do what they hope to Chinese chips but I think this option of the CPC taking the Taiwanese foundries intact is not necessarily one I’d bet on. The west will do their utmost to kidnap/evacuate (maybe even kill those who this isn’t an option for) the top chip engineers and scientists and leave nothing but rubble. I’d bet there’s a good chance they have paid off people or NSA sabotage equipment in those foundries that on a remote command will wipe everything in terms of useful technical data, schematics, etc.

They just have this hope that if they can force Europe to decouple (and given Ukraine and Nordstream it seems European leadership are more than willing to throw themselves on the US sword on command) and that that plus their own embargoes and sanctions and possession of the technical knowledge and being ahead will allow them to strangle China enough to keep it behind a few generations until they can do something else.

People mention competition. The point of things like “clean networks” initiative is IMO to eventually expand that. If you hold the high-ground, have the better technology you can threaten companies and whole countries with an ultimatum of either commit not to use any Chinese tech that’s sanctioned (everything towards the high end will be) or don’t and get sanctioned yourself in a way with an inability to use or purchase more advanced western technology. So basically choose. Either us with the better stuff or them with worse and use that and other forms of leverage to stymie markets for Chinese technology products and smother their whole industry or at least exclude it from the west and whatever other countries they can use their economic hold on to force through the same.

It’s also very likely if they can instigate a conflict over Taiwan that they will declare all Chinese chips as being produced by and supporting aggression and repression and all the usual liberal buzzwords and sanction their export, purchase, etc. Which if the US still has dollar hegemony it will wield to prevent third party countries from transporting them, selling them, etc or suffering secondary sanctions which will succeed in getting a large number of companies and countries to move to western chips out of fear. And this will be their way of coercing say Latin/South America and parts of Asia that unlike Europe won’t go along with the whole economic suicide plan.

The end of this may end up being a two camps situation ala the cold war again but with the US in retreat, pulling back with its loyal vassals and accomplices in Europe, Japan, occupied Korea, Australia, etc and trying to maintain that closed off system as long as they can in the face of BRICS. Things will get pretty awful for those behind this US sanctions curtain as prices will increase, product quality will drop, wages will remain stagnant and various other bad reactionary things will take hold.

They are desperately scrambling up a mountain on their hands and knees trying to get high enough and far away enough from China that they can build a fortress there and use it as leverage to maintain hegemony.

I just hope that Taiwan Province comes to see reason, which thankfully they slowly seem to be.