If Huawei really is basically a PLA front like US natsec state says (the tech and defense industries are hand and glove in every country that is strong in both, so it's a pot calling a kettle black there) then the PLA will just move on to other companies. Huawei was a big success story as a national champion but this is a minor setback for China in the long run.
The US defense industry is partially dependent on the Chinese electronics industry, but the Chinese electronics industry is very dependent on a global semiconductor supply chain that is still mostly controlled by US-aligned states. The goal of the US natsec state is to keep it that way. The empire is actually shooting itself in the foot by forcing China to accelerate the growth of its semiconductor industry. A deal where Huawei continued to buy chips from TSMC and continued to sell equipment to the west (with the west's security concerns addressed) could have been reached, and that deal would have kept China dependent on the west for longer. Now they're going to put even more effort into growing SMIC and the microelectronics industry generally.
My thoughts are they should/are going to pivot to computer manufacturing, and once China has a robust computer manufacturing sector there isn't a whole lot China needs the west for I think. Consumer market aside, of course. We might see some pretty cool stuff happen at that point.
