It's quite simple. The US has companies that both consume a large amount of the chips (AMD, Apple, Qualcomm, etc.) and companies that are crucial to the chip making supply chain (Applied Materials, Micron, KLA, etc.). This means US has more power than China at dictating the chip manufacturing industry.
If the US tells TSMC to ban Huawei from using its fabs, it can because TSMC relies on American customers (Apple, Qualcomm) more than Chinese customers and it relies on American supply chain companies such as Applied Materials.
This is why China needs to build out its own tech for chips. If China succeeds, they might exclude the US from their tech in the distant future. IE. Chinese tech companies might have an advantage over American tech companies because they have access to more, faster, cheaper chips. Today, this is reversed.
All of these things are just economic battles. You might hear things like Huawei is banned because it has ties to China's military as justification for banning Huawei. But it's all just to slow down China's economic rise, nothing more. Most major US tech companies likely have some ties, directly, or indirectly with the US military.
In other words, US is about to lose its hegemony and it's doing whatever it can to maintain. But doing this will not only hurt Chinese companies as US counterparties also lose a revenue source and in turn reducing their capacities in researching which are essential to keep their cutting edge. Such move for sure can slow down China for a while, at the same time also helped China to learn that there is always something it should not only buy from other countries in a hard way. But once China overcomes from that, what else can US do?
If the US tells TSMC to ban Huawei from using its fabs, it can because TSMC relies on American customers (Apple, Qualcomm) more than Chinese customers and it relies on American supply chain companies such as Applied Materials.
This is why China needs to build out its own tech for chips. If China succeeds, they might exclude the US from their tech in the distant future. IE. Chinese tech companies might have an advantage over American tech companies because they have access to more, faster, cheaper chips. Today, this is reversed.
All of these things are just economic battles. You might hear things like Huawei is banned because it has ties to China's military as justification for banning Huawei. But it's all just to slow down China's economic rise, nothing more. Most major US tech companies likely have some ties, directly, or indirectly with the US military.