Yes. ASML is the only company making these machines. And both, they own thousands of patents and are also the only ones with the institutional knowledge required to build them anyway.

I thought Fermi paradox is about nukes; I increasingly think it's about chips

They can - if they are willing to invest a a lot of money over several years. The US got Nuclear bombs in a few years during WWII with this thinking, and China (or anyone else) could too. This problem might be harder than a bomb, but the point remains, all it takes is a willingness to invest.

Of course the problem is we don't see what would be missed by doing this investment. If you put extra people into solving this problem that means less people curing cancer or whatever. (China has a lot of people, but not unlimited)

Designing such an advanced lithography machine is probably a Manhattan Project scale task. China is indeed trying to make progress and they will probably get there someday but for now ASML is the only company in the world that knows how to build these or anything remotely close.

ASML is not the only sole supplier involved. There's a few more layers of them you have to replace.

Right, the most famous example is Zeiss which is the only company in the world that builds the high-precision mirrors needed for the most advanced ASML machines. I’m not sure if those are subject to export bans too, but even if they are, I think China could eventually figure out how to build them. It’s just a matter of a huge amount of R&D that would need to be done first.

If you want EUV (lowest nm), you'll need ASML, and they won't sell it to random strangers. EUV isn't exported to China. Only the end product is.