Governments work by interests, Israel could benefit way more from China than from Taiwan, and signing an agreement does no harm to the Taiwanese. In fact most of the Taiwanese want to keep the status quo and live in peace. this is the formal reason.
Still, anyone with a sane mind would see that Taiwan is an independent country, its population wants nothing to do with China, and just wants to live in peace and prosper. But China wants TSMC for itself, or no TSMC at all, and is essentially warmongering.
They are genetically Chinese. Obviously they want to be culturally different than the Chinese.