Answer here is Japan didn’t fail on the technical side. They couldn’t secure a market shrinking from cost challenges because they had a less appealing service model so they cut tail rather than support an extremely expensive technology that would have trouble securing customers.

This is one of the biggest errors that most people make when trying to gauge progress and position in technology contests. It’s often not the technical challenges that decide whether some country or another has a tech lead in a market, but the business dynamics.

Of course these things are only true when you have global openness and competition. When you don’t capability comparisons go back to technical comparisons for deployment, but business dynamic comparisons remain from an economic/production efficiency standpoint.

In China’s case the bans have created a reverse import substitution situation. What this means is that China firms have a captive market, so foreign competition questions in the vein of what shaped Japan’s decisions on EUV is out of the picture.