Due to Western export restrictions, ASML is only allowed to export some of these machines to China; the most modern equipment is subject to a complete blockade.

In the past quarter, 14 percent of the machines that ASML sold went to China.

Play stupid games and win stupid prizes.

Preventing one of your biggest customers (China) from getting the equipment they need forces them to make it themselves.
Now China can make their own DUV lithography machines of similar quality to the ones they can get from ASML.
And obviously it won't stop there, China will continue to improve, and probably in a few years compete with ASML on the high end EUV equipment too.