Taiwan fabrication labs, where the most cutting edge tech is produced, are above capacity. This is the core of this discussion.
They are building new fabs inside and outside of Taiwan to catch up to demand, but as of now those are one or more generations behind.
To the rest of your initial statement, it starts with a flawed premise so not worth responding.
>I think Taiwan is being put as a sacrificial lamb almost by the US and I think it's in Taiwan's best interest to play to both sides more.
I am citizen, not a resident.
Taiwan's position as the first chain island is it's primary strategic advantage to both US as well as other Asian neighboring countries in the region.
Taiwan follows international law in effort to maintain and regain it's international standing. Taiwan maintains diplomatic and trade relations with China,but recognize that China is actively taking direct actions to limit Taiwan's political and economical relations and growth.
Reliance on a hostile neighbor that continually reminds you they will force unification by military action if necessary is a losing game, and trusting carrots like "one nation, two systems" lost all credibility with the downfall of Hong Kong.