I like Taiwan (I admire China as a civilization, and the democratic part of it especially), but chip production should be decentralized.

Bleeding edge is good and all, but there are plenty of applications where you don't need anything near bleeding edge. While centralized production means centralization around one specific chain of countries involved in that production. A major center somewhere else would most likely have a different chain. A few major centers - even more. That would create redundancy and improve competitiveness.