I would imagine there would at least be a sharp decrease in yield rates. Hard to imagine all those Taiwanese TSMC workers working hard to ensure the technological dominance of mainland China.
There's a reason PRC has much more success poaching TSMC employees than US trying to fill up new fabs. Why TW has drafted laws to prevent TW semiconductor talent from working on mainland. Generally TWers prefer working in PRC, with comparable language / culture. Great compensation and quick flight home. Reality is most of TSMC employees will been prevented from being paperclipped to the US in event of war, their future will be firmly tied to PRC and as significant assets, they'll be treated with more carrots than sticks.
Don’t worry, Intel is expanding foundry capacity for this case. Apple SoC will stay on the same node for couple years, but that’s not an end of the world for consumers.
TSMC also has the WaferTech fab in the US and is currently building fabs in the US and Japan. I imagine geopolitical diversity is one goal in the placement of those new fabs.
But it'd still lead to a massive global chip shortage if TSMC's facilities in Taiwan were wiped out. And I guess that is a deterrent that Taiwan can use against China.