Most precompetitive research in the semi industry also happens at Imec in Belgium. The ASML litho machines are a single step in even just the wafer production

Most precompetitive research in the semi industry also happens at Imec in Belgium. The ASML litho machines are a single step in even just the wafer production process, there are several companies involved in making and processing masks, doing the etching, cleaning solutions, etc. As many industries, it's a highly globalized supply chain, with many companies distributed around the world specializing and leading different aspects. And yes, several of them are in the EU. As to why the governments would do this, well it's geopolitics. The EU has some big players in the industry, but other parts of the supply chain are elsewhere. When all big geopolitical powers are interdependent, then no player will move to block another off at risk of hurting themselves. Now, both China and the US are shoveling billions into developing a higher independence (even before the trade war). Likely, the EU feels it is now forced to follow suit, or risk having e.g. the access to high-volume fabs to be a bargaining chip in future trade negotiations.