Taiwan is more valuable to China in other ways than just it's semiconductor industry. It enables them to break the first island chain ...There aren't yet any Chinese owned fabs with the ability to make chips on 12 nm, however, SMIC is close and they've increased spending on achieving that breakthrough.
And it's still unknown how the situation with China - Taiwan is going to play out. With China's increased sabre rattling after their latest 5 year congress, there's still a possibility that China will attempt a forceful takeover of Taiwan. Of course, if that happens, I fully expect that TSMC has plans to attempt to destroy their fabs in Taiwan in order to deny China access to them.
Regards,
SB
Besides Taiwan knows that their a one trick pony that doesn't offer much else to the world in other strategic industries such as aerospace, defense, biotechnology, or energy to prop up their own value proposition ...