Its depends on what direction state want to go. As we know, SMIC is public listed, not easy for state to intefere unless it will go bankruptcy.You think that China will just let its main chip manufacturer just fail?
Its still many variable, what options SMIC taken, if the follow US regulations they lost State support, if the defy US they got state support. In October is supposed to be central planning for 5 year's plan. 11 November US election. After that's we got clear picture what really happened.
It's not like death or alive for state that's need urgently replacement foreign chip. For state its important for military self sufficient the rest lets market decided. Made in China 2025 doesn't mean total replacement foreign chip. Its merely boost domestic chip to certain percentage.
Bear on mind, the largest Fab company in Taiwan. If US or other country push China to the edge, 100% China will attack Taiwan and reunification. Then the whole world will lost to cutting edge Fab company.
AI, Smart City, 5G and IoT will fuel 4th industrial revolution, the need of China for semiconductor, robotics and machinery beyond imagination. It will born hundred or thousand unicorn company. US put handbrake it's not surprised. They also want big cake for 4th industrial revolution in China.
Ultimate goal for US is opening China market for US company as big as possible. Worst case scenarios delay China 4th industrial revolution as much as possible so they can grab world market ahead of time.