When there is a giant like ASML in the market, the competition is squashed out pretty quickly. Especially when the barriers of entry are so high like in fab space, the competition does not stand a chance to capture any good tenders.

Pull ASML out of the equitation to "punish" Chinese- suddenly those "bug" fab companies are flourishing and winning tenders left and right and suddenly become viable businesses. Give it X years and they are competitors.

Of course if this is a viable route, you may ask : Why don't China ban ASML then? They could, but of course there is going to be short term pain in impacting all levels of supply chain and therefore macro economics. They may not want to take the hard pill.