While the US claims it's simply trying to boost its own domestic chip production, what it's actually doing is pushing China out of the industry altogether. In an already-struggling semiconductor production industry, the US is further disrupting a global economy that relies heavily on these technologies.
With China rapidly encroaching militarily on US allies in the Pacific, these new restrictions are positive news. The tight relationship between national security and semiconductor production has been recognized for decades; if China were to surpass the US in the long-term, it could quickly become dominant in every area of warfare. The US is right to withhold such resources from its top geopolitical adversary, which would undoubtedly use them for nefarious purposes.
There's a 50% chance that China will spend at least $36M on importing diodes and semiconductors in 2022, according to the Metaculus prediction community.