Taiwan and China are not like north and south korea. People move between countries freely. Many TSMC engineers have moved to the mainland.

China has immense engineering capability and is replicating the entire western semiconductor supply chain within its borders.

They have the money, the engineering capability, the will and full support from the government. It is inevitable.

I am aware, I live in Taiwan. While TSMC engineers can be poached "move between countries freely" is not true because moving from China to Taiwan is not so easy.

The key word you mention is "replicating." They'll be chasing for a while still, and it's not clear that they'll be able to leap ahead. Copying is much easier than real innovation.