Yea, can take a look forex reserves ROC has accumulated over years. Naturally taiwan want to keep twd dollars down. Price matters the most, in foundry business.
At least (for now?) taiwan has technology edge in semiconductors. When they started in the late 80s, they were like way behind. They closed a gap and eventually tsmc became one of best semiconductor company. As mentioned investments are heavy capital intensive (finance + energy), so will be really hard for china to catch up. Plus you need a lot experience, but chinese learning fast and there is unlimited governmental money. Will see. They establishing funds with like over 200 billions of usd, just for chips industry. Not sure either is worth it economically, but party def wants close a gap chinese companies has with tsmc.
As long taiwan will matters economically, or in technological way, taiwan can have a freedom and own way of living. As soon it does not matter, they can nuke hell of it. World will turn away, as long there is steady supply of new cars, phones, pc…
Is a policy taiwanese politics has, to keep twd down, labour is cheap, so yea business people “are not motivated” to build up margin, brends and pay better salaries. It takes decades for mentality to switch. However am sure taiwan will finds its own way in future
China is already/slowly moving up on value chain, and is question how long can taiwan ignore/survive without chinese investment. They saying chinese managers already paying better than taiwanese.