I think the more strategic importance is cementing internal legitimacy (domestic stability) while ensuring open sea access. They don’t care about blockading taiwan. They care about Taiwan blockading they (with our blessing)

SMIC sucks, but they don’t suck that bad. IIRC they’re like 1-3 generations behind, but again, not capitalist so yield matters a bit less. ASML not selling EUV to them is a big setback, but only time will tell if it is an insurmountable one.