> the likely outcome of an invasion would be that TSMC in Taiwan permanently shuts down

It would turn into rubble.

There is no way that facility would be ceded.

There are real people on the other side as well. Don't forget them.

I'll give you some food for thought.

During WW2 Allies bombed 3rd reich's weapon factories, and occupied French cities. A lot of civilians died, really a lot.

Do you think semi-enslaved German citizens working in 3rd reich's weapon factories wanted any much less to have these factories bombed?

Do you think French under German occupation wanted any much less to have British bomb the occupied cities?

No, survivors recall it seeing occupation government buildings bombed the most joyful moments, which led a lot of people to regain their spirits, and join the resistance.

MAD. I don't think anyone in the US or China is going to nuke anyone else because of survival instincts. There must be chain-of-command and multi-party custody controls in the militaries of all nuclear powers to prevent unauthorized release. In such stable cases, they become worse than White Elephants: can't get rid of them because of the liabilities of inviting nuclear and conventional wars, and can't keep them because they're expensive, inherently dangerous, and tempting for crazy people to use.

Economic interdependence also creates another layer of protection from either side going too far because of the economic warfare potential before nuclear or conventional wars would be considered.

I'd suggest reading Ellsberg's book (The Doomsday Machine) detailing the risks imposed by MAD.