The big thing that caused all the differential was scan lithography vs step-and-repeat lithography.
The US companies made a bet that step-and-repeat was the future of photolithography. They were entirely correct, but it took longer than expected to make it work well and bring the cost down.
However, in the meantime, the Japanese continued refining scan photolithography and absolutely slaughtered the US companies on production cost.
Eventually, scan lithography ran out of gas and the situation reversed--the US companies were similar production cost and could produce chips that the Japanese couldn't even try without retooling everything.
The US companies made a bet that step-and-repeat was the future of photolithography. They were entirely correct, but it took longer than expected to make it work well and bring the cost down.
However, in the meantime, the Japanese continued refining scan photolithography and absolutely slaughtered the US companies on production cost.
Eventually, scan lithography ran out of gas and the situation reversed--the US companies were similar production cost and could produce chips that the Japanese couldn't even try without retooling everything.