Let's see, start WW3 over some tiny island because we over invested in chip manufacturing... or make a deal. Tuff choice.
Discussion
You said everyone's happy. Everyone includes the Taiwanese people or do they not count?
Try convincing the Taiwanese people they shld be happy to be sold out and stabbed in the back for the sake of everyone else.
I don't have to convince them and I don't wish to be held hostage over a tiny island that soon won't matter.
Who's holding who hostage though?
America made a mistake (your words). And so the solution is to punish an ally and push responsibility off to the ones who, up to this point, has significantly and directly contributed to America's technological success, by selling them out to America's enemy for a perceived political peace...
So America gets to make a mistake and overinvest. And now America faces a perceived threat of ww3. So America decides to make a deal to stab Taiwan in the back and sell them off to China, the perceived enemy in the first place.
Now "everyone" is happy? Who's getting punished for who's mistake here?
Make that logic make sense.