Considering the sheer magnitude of the cost of building out a bleeding edge fab, wouldn't it make sense to start with a somewhat older (but still incredibly useful) process node, develop domain expertise and then iterate? Going from 0 to 2nm is sure to yield little more than a boondoggle. Catching up is going to be a decade long process - if not longer. But you do have to start somewhere.
Plus, the only vendor of EUV lithography machines is likely 100% committed for the foreseeable future. DUV machines are much easier to get - you can go to ASML, Nikon, Canon and I assume a few others - while you find some space on the EUV order books.
They are not coming from zero. This joint venture is 70% TSMC, so it is essentially guaranteed that they are basically just going to copy/paste an existing TSMC fab. There is not going to be any "catching up" when the company you want to catch up with it literally yourself.
Besides, there are already plenty of fabs in Europe at these nodes at companies like GlobalFoundries. Getting another one isn't going to be very useful in trying to catch up, especially when it is one from just before a huge paradigm shift. It's not going to teach them anything about EUV, so they would be trying to catch up from 7-8 nodes behind without even using the technology needed to reach the cutting-edge.
Plus, the only vendor of EUV lithography machines is likely 100% committed for the foreseeable future. DUV machines are much easier to get - you can go to ASML, Nikon, Canon and I assume a few others - while you find some space on the EUV order books.