I agree the imposed embargo re advanced chips between Taiwan and China undermines Taiwan's national security but this contradicts the earlier point that China doesn't care at all about chips.
My apologies, I should have been more clear. Here is my read of the situation:
China doesn't care in the sense that the threat of destroying fabs isn't going to factor into the Chinese leadership's desire to reunify. The issue of reunification is ideological; many Chinese people themselves view Taiwan as a break-away province.
China also does care, at least a little bit, in the sense that having access to Taiwanese chips will free up some economic resources within China itself that could be used in another strategically important industry instead. Allowing chip trade between Taiwan and China also encourages some Chinese economic dependence on Taiwan, though still not a decisive factor in whether China wants to reunify (by force if needed). But it buys Taiwan a bit more time, at least for now.
Banning chip trade between China and Taiwan weakens Taiwan's national security because it immediately removes even that smidgen of Chinese economic dependence on Taiwan (thus possibly accelerating Chinese plans for reunification), and it makes Taiwan much more dependent on the US, which has in recent weeks thoroughly proven itself to be an unreliable partner.
