Yes and it can also reduce competitive forces which were driving Intel to innovate. The goal of a robust supply chain is not aligned with the goal of technical supremacy. Sure, the US did achieve technical supremacy in the past with government intervention and assistance, but the world was much different then. Now the US has to compete with East Asian innovation.
Asian innovation often is the result of industrial policy to get started. Once it gets going, the state can and should let go and let market forces work.
I don't think that the basic situation has changed in that regard. China is currently trying hard to catch up in semiconductor manufacturing and AI. It seems to be working somewhat for AI (Qwen), we need to wait and see about semi manufacturing. A curious and long-term failure so far is civil aviation.