TSMC's chip fabrication tech is world leading, and is vital for thousands of other industries. Nearly every computing device has some of TSMC's parts in, and if TSMC tech was restricted, performance metrics would decrease across a lot of industries.

That's why both China and the US are offering TSMC sweetheart deals to not sell tech to the other.

Whoever loses this battle will probably be left 3 years behind in CPU and GPU performance. Which in turn will make them dead in smartphones, laptops/desktops, cloud computing, scientific simulations, etc.