I would imagine there would at least be a sharp decrease in yield rates. Hard to imagine all those Taiwanese TSMC workers working hard to ensure the technological dominance of mainland China.

>Hard to imagine all those Taiwanese TSMC workers

There's a reason PRC has much more success poaching TSMC employees than US trying to fill up new fabs. Why TW has drafted laws to prevent TW semiconductor talent from working on mainland. Generally TWers prefer working in PRC, with comparable language / culture. Great compensation and quick flight home. Reality is most of TSMC employees will been prevented from being paperclipped to the US in event of war, their future will be firmly tied to PRC and as significant assets, they'll be treated with more carrots than sticks.

Not sure if it's true, but I've heard that Taiwan has already rigged all of TSMCs facilities with explosives specifically to deter Chinese invasion.

I wonder if a few smoke bombs in the clean rooms would be enough?

It is certainly not hard to destroy the machines. But getting the expertise and data is worth a lot anyways, if you are already at this stage.

Imagine the chip shortages then!

Don’t worry, Intel is expanding foundry capacity for this case. Apple SoC will stay on the same node for couple years, but that’s not an end of the world for consumers.

TSMC also has the WaferTech fab in the US and is currently building fabs in the US and Japan. I imagine geopolitical diversity is one goal in the placement of those new fabs.

But it'd still lead to a massive global chip shortage if TSMC's facilities in Taiwan were wiped out. And I guess that is a deterrent that Taiwan can use against China.