Honestly that would mean there's ample room for competition considering what's happening especially with Intel, Nvidia, and AMD. Though I imagine the barrier to entry is high.
I think the answer to OP is in the combination then? High barriers to entry means there are fewer competitors for talent - leading to stagnating wages. It might all change with news like the above shaking things up..
I could imagine a collaboration effort from companies like Google, Intel, Nvidia, and Amazon that would reduce the risk to each individual company and result with big benefits. There's been a lot of talk lately about TSMC not being able to produce enough chips for demand. Sounds like the time to take the risk is better than previously.
(I'd also argue that there are benefits to having a fab lab closer to these companies headquarters)
Playing catch-up is a lot easier than innovation. I'm not sure I buy the claim that another company couldn't catch up. The reason being because if you took all the employees from TSMC and put them in another company (and you weren't worried about IP claims) what would be different? We've seen several companies make up a lot of ground in a short period of time (AMD as an example). But also, 10 years isn't that long.
Actually the major problem for most fabs (Intel/GloFo/Samsung/etc) is not that they can't make 7nm chips, it's they can't make it cheap enough (in high enough yields) to compete with TSMC. However in this case, China can subsidize SMIC to produce at a loss until they eventually catch up compared to the open market.
