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Xiaomi may manufacture their chips in Taiwan (by tsmc) but Xiaomi is still a Chinese hardware company, similar to how Apple or Qualcomm are US American hardware companies.
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No. The problem is that TSMCs new capacity is already hogged by AI peddlers for years to come (in fact, AI BS is the reason why these new non-Taiwanese fabs got the massive US and EU subsidies), and so everyone else not flush with cash from the AI hypetrain has no alternative than to go to China - and deliver all their secrets to the CCP.

And eventually, just like the Western solar, battery, pharma and car companies all have learned, the CCP will use that knowledge to surpass and undercut everyone else.

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Do they also deliver all their secrets to US/EU/Taiwan/etc or is it only with China that it goes from ordering some products manufactured to "deliver all their secrets"? Strange how almost everyone points their fingers at the CCP when we know for a fact (hey Snowden etc) that the US does what we say we think China does. I guess China bad > facts.
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Goddamn turbocapitalist commies! How dare they!
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