diff --git a/packages/compiler-cli/src/ngtsc/core/src/compiler.ts b/packages/compiler-cli/src/ngtsc/core/src/compiler.ts
index 460ec49ab86ea..6c7ad8bc88484 100644
--- a/packages/compiler-cli/src/ngtsc/core/src/compiler.ts
+++ b/packages/compiler-cli/src/ngtsc/core/src/compiler.ts
@@ -448,11 +448,18 @@ export class NgCompiler {
     const compilation = this.ensureAnalyzed();
     const ttc = compilation.templateTypeChecker;
     const diagnostics: ts.Diagnostic[] = [];
-    diagnostics.push(...ttc.getDiagnosticsForComponent(component));
+    try {
+      diagnostics.push(...ttc.getDiagnosticsForComponent(component));
 
-    const extendedTemplateChecker = compilation.extendedTemplateChecker;
-    if (this.options.strictTemplates && extendedTemplateChecker) {
-      diagnostics.push(...extendedTemplateChecker.getDiagnosticsForComponent(component));
+      const extendedTemplateChecker = compilation.extendedTemplateChecker;
+      if (this.options.strictTemplates && extendedTemplateChecker) {
+        diagnostics.push(...extendedTemplateChecker.getDiagnosticsForComponent(component));
+      }
+    } catch (err: unknown) {
+      if (!(err instanceof FatalDiagnosticError)) {
+        throw err;
+      }
+      diagnostics.push(err.toDiagnostic());
     }
     return this.addMessageTextDetails(diagnostics);
   }
diff --git a/packages/language-service/test/diagnostic_spec.ts b/packages/language-service/test/diagnostic_spec.ts
index 11d032449a1fe..8c8cd73fa7565 100644
--- a/packages/language-service/test/diagnostic_spec.ts
+++ b/packages/language-service/test/diagnostic_spec.ts
@@ -492,6 +492,49 @@ describe('getSemanticDiagnostics', () => {
        const diags = project.getDiagnosticsForFile('app.html');
        expect(diags.length).toEqual(0);
      });
+
+  it('generates diagnostic when the library does not export the host directive', () => {
+    const files = {
+      // export post module and component but not the host directive. This is not valid. We won't
+      // be able to import the host directive for template type checking.
+      'dist/post/index.d.ts': `
+      export { PostComponent, PostModule } from './lib/post.component';
+    `,
+      'dist/post/lib/post.component.d.ts': `
+      import * as i0 from "@angular/core";
+      export declare class HostBindDirective {
+          static ɵdir: i0.ɵɵDirectiveDeclaration<HostBindDirective, never, never, {}, {}, never, never, true, never>;
+      }
+      export declare class PostComponent {
+          static ɵcmp: i0.ɵɵComponentDeclaration<PostComponent, "lib-post", never, {}, {}, never, never, false, [{ directive: typeof HostBindDirective; inputs: {}; outputs: {}; }]>;
+      }
+      export declare class PostModule {
+          static ɵmod: i0.ɵɵNgModuleDeclaration<PostModule, [typeof PostComponent], never, [typeof PostComponent]>;
+          static ɵinj: i0.ɵɵInjectorDeclaration<PostModule>;
+      }
+      `,
+      'test.ts': `
+      import {Component} from '@angular/core';
+      import {PostModule} from 'post';
+
+      @Component({
+        templateUrl: './test.ng.html',
+        imports: [PostModule],
+        standalone: true,
+      })
+      export class Main { }
+       `,
+      'test.ng.html': '<lib-post />'
+    };
+
+    const tsCompilerOptions = {paths: {'post': ['dist/post']}};
+    const project = env.addProject('test', files, {}, tsCompilerOptions);
+
+    const diags = project.getDiagnosticsForFile('test.ng.html');
+    expect(diags.length).toBe(1);
+    expect(ts.flattenDiagnosticMessageText(diags[0].messageText, ''))
+        .toContain('HostBindDirective');
+  });
 });
 
 function getTextOfDiagnostic(diag: ts.Diagnostic): string {
diff --git a/packages/language-service/testing/src/env.ts b/packages/language-service/testing/src/env.ts
index 6485a82d539f9..4d3d1b31b765c 100644
--- a/packages/language-service/testing/src/env.ts
+++ b/packages/language-service/testing/src/env.ts
@@ -48,12 +48,15 @@ export class LanguageServiceTestEnv {
 
   constructor(private host: MockServerHost, private projectService: ts.server.ProjectService) {}
 
-  addProject(name: string, files: ProjectFiles, options: TestableOptions = {}): Project {
+  addProject(
+      name: string, files: ProjectFiles, angularCompilerOptions: TestableOptions = {},
+      tsCompilerOptions = {}): Project {
     if (this.projects.has(name)) {
       throw new Error(`Project ${name} is already defined`);
     }
 
-    const project = Project.initialize(name, this.projectService, files, options);
+    const project = Project.initialize(
+        name, this.projectService, files, angularCompilerOptions, tsCompilerOptions);
     this.projects.set(name, project);
     return project;
   }
diff --git a/packages/language-service/testing/src/project.ts b/packages/language-service/testing/src/project.ts
index 5e84317c0fcb0..228ba36fc21e4 100644
--- a/packages/language-service/testing/src/project.ts
+++ b/packages/language-service/testing/src/project.ts
@@ -21,7 +21,7 @@ export type ProjectFiles = {
 
 function writeTsconfig(
     fs: FileSystem, tsConfigPath: AbsoluteFsPath, entryFiles: AbsoluteFsPath[],
-    options: TestableOptions): void {
+    angularCompilerOptions: TestableOptions, tsCompilerOptions: {}): void {
   fs.writeFile(
       tsConfigPath,
       JSON.stringify(
@@ -36,11 +36,12 @@ function writeTsconfig(
                 'dom',
                 'es2015',
               ],
+              ...tsCompilerOptions,
             },
             files: entryFiles,
             angularCompilerOptions: {
               strictTemplates: true,
-              ...options,
+              ...angularCompilerOptions,
             }
           },
           null, 2));
@@ -57,7 +58,7 @@ export class Project {
 
   static initialize(
       projectName: string, projectService: ts.server.ProjectService, files: ProjectFiles,
-      options: TestableOptions = {}): Project {
+      angularCompilerOptions: TestableOptions = {}, tsCompilerOptions = {}): Project {
     const fs = getFileSystem();
     const tsConfigPath = absoluteFrom(`/${projectName}/tsconfig.json`);
 
@@ -73,7 +74,7 @@ export class Project {
       }
     }
 
-    writeTsconfig(fs, tsConfigPath, entryFiles, options);
+    writeTsconfig(fs, tsConfigPath, entryFiles, angularCompilerOptions, tsCompilerOptions);
 
     // Ensure the project is live in the ProjectService.
     projectService.openClientFile(entryFiles[0]);
diff --git a/packages/language-service/testing/src/util.ts b/packages/language-service/testing/src/util.ts
index 3d345e0479d4f..d6bb74ff3a2ca 100644
--- a/packages/language-service/testing/src/util.ts
+++ b/packages/language-service/testing/src/util.ts
@@ -49,7 +49,7 @@ function getFirstClassDeclaration(declaration: string) {
 
 export function createModuleAndProjectWithDeclarations(
     env: LanguageServiceTestEnv, projectName: string, projectFiles: ProjectFiles,
-    options: TestableOptions = {}, standaloneFiles: ProjectFiles = {}): Project {
+    angularCompilerOptions: TestableOptions = {}, standaloneFiles: ProjectFiles = {}): Project {
   const externalClasses: string[] = [];
   const externalImports: string[] = [];
   for (const [fileName, fileContents] of Object.entries(projectFiles)) {
@@ -72,7 +72,7 @@ export function createModuleAndProjectWithDeclarations(
         export class AppModule {}
       `;
   projectFiles['app-module.ts'] = moduleContents;
-  return env.addProject(projectName, {...projectFiles, ...standaloneFiles}, options);
+  return env.addProject(projectName, {...projectFiles, ...standaloneFiles}, angularCompilerOptions);
 }
 
 export function humanizeDocumentSpanLike<T extends ts.DocumentSpan>(