The CCP understands (or at least was predicting back with Jiang and Hu) that eventually China will democratize. Taiwan is a democracy right now. Democratic countries almost never re-unite into a single country. I can only name one instance of this happening in the last 70 years, and in some ways East Germany wasn't really a democracy yet.
The CCP knows that Taiwanese reunification will never really happen peacefully. Leaders will talk about it, they'll negotiate a bit, but then it won't happen because the status-quo is always more attractive. They know that their only chance at national reunification is now or in the next 10 years or so.
It's now or never. It has to happen by force or it will never happen. If China swallows Taiwan and then democratizes, that can be managed - a restive province can be placated and bought-off. But if China democratizes before reunification, then Taiwan is separate forever.
I do agree that to China, Taiwan isn't about TSMC. TSMC is the reason why the US cares about Taiwan but not the reason why China cares about it. If it was the main reasoning why doesn't China go after the Dutch? The dutch have ASML, which manufactures the more critical components involved with EUV lithography. But China never made a single move against ASML.
There is deep history between Taiwan and China, and it is this history that is the main reason why China eyes Taiwan. Think of it like if California rebelled and became a separate country from the US 50 years ago. How would the rest of the US think about California?
They're fine burning the rest of the world's supply chain down as long as it leaves them a monopoly.
If I was Taiwan, or in other words a shareholder or OWNER of TSMC, I wouldn't want something I own being destroyed. I would rather fold into the new regime and keep my original ownership.
