Taiwan made the foundry business a strategic priority for multiple reasons. Intel at least for the US was always a business with national security impact. Europe never realized the importance and didn't make it anywhere near priority. They did not provide enough on-going incentives nor did they protect their companies from being sold to foreign ones. Instead the companies jumped hard on the outsourcing train and pushed as much manufacturing abroad as possible. This was a very shortsighted move that temporarily increased profits but traded the future for it. When nation-states put their weight behind something then it's nearly impossible to compete unless your own nation-state puts their weight behind you as well.

There is still some chance for Europe to come back into it but I have doubts they'll find the will to do it.

America and Asia have cheaper labor and energy although I don't know how much of an advantage that really is for such a highly complex product.

ASML who makes the EUV machines and Carl Zeiss who make the optics for the ASML machines are both in Europe?

There is a really good video about it: https://www.youtube.com/watch?v=5ZdmS-EAbHo

So potentially they could even go to finer architectures?