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What they conveniently leave out is that it sometimes takes over a decade for a correction
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The market can stay irrational longer than you can stay solvent
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The beauty of supply and demand magic is that the market is now open for anyone that can provide server hosting cheaply.
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I can't wait for a scrappy startup to spend a couple billion dollars and several years setting up a new fab for chips so we can see the prices go down!
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Good luck getting the hardware for that eh?
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That's the rub. There is no such thing as "anyone that can supply hardware cheaply"

Either it's an established vendor with designs and fabs or it's a newcomer that needs to invest a massive pile of cash in designs and fabs. Neither are cheap.

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I volunteer my laptop, I suggest you and others do the same. We can hook them up in a VPN with E2ee. We just need 1 public IP. Lets Go!
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It is supply and demand but chip supply isn't very elastic and the producers are conservative about adding capacity that won't be needed by the time it's online.
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SK Hynix just said they want to double wafer production by 2031.
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By 2031 the best employer in Europe will be the water gangs.
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I mean, I want to double the the number of billions of dollars I have by 2031, doesn't mean I will. (actually I have 0 billion and double 0 billion is still 0 billion, so unlike them I'll accomplish that goal).
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They already ordered Hanmi equipment and started construction at Yongin Mega Fab. Sounds pretty serious to me.
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Doesn’t this presume that chip fabs are betting that the AI boom is a bubble that’s going to pop?

Seems kinda hard to believe at this point, no?

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No. It doesn't have to be a bubble at all. It just has to be a cycle of rapid capital equipment build-out that returns to more normal levels in a few years.
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Hard to believe that an industry making money hand over fist are reluctant to spend tens of billions expanding capacity that won't come online for years?

There have been SEVERAL crashes that have wiped out the market and it's the reason there are so few players, the rest of them went bankrupt after periods of over-expansion. (in the 80s caused by Japan, in 1997, in 2001ish after the dotcom bust)

You're even calling it a bubble so it's not exactly "hard to believe" it will pop.

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Idealistically, actual consumer driven capitalism would be much closer to supply/ & demand than this (imo) almost completely artificial, government sponsored bubble. I think pricing before this current bubble reflects that.
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Because, oddly enough, there are a lot more things going on. Government incentives, companies trying to stranglehold markets, FOMO-fueled massive investiment into the current fad, etc. Just to name a few.
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I was also told this. Why isn't it happening? Can some capitalists explain why capitalism isn't happening the way it's supposed to? Is it because of government regulations, do we need to deregulate?
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“Is it because of government regulations, do we need to deregulate?”

Insufficient law enforcement. The same memory manufacturers already broke antimonopoly laws in the past, pleaded guilty. Apparently the fines were too small for these companies to care, and the people responsible were promoted instead of being punished. More information: https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal

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Capitalism isn't a magical instant fix.

In this context, it takes spending enormous piles of money over the course of at least several years to spin up new semiconductor production.

We do need more capacity to keep up with AI datacenters' usage, yes.

But adding long-term capacity years down the road for a thing that some folks seem to confidently think is a bubble that can pop at any time is risky. And (because capitalism), we have to manage carefully balance our risks and rewards in order to maximize our odds of success.

If there is no bubble and demand stays high long-term, then the payoff for that risk is potentially enormous.

If there is a bubble and it bursts, then the cost of that risk is potentially devastating.

(Capitalism works most-predictably when cheating is possible, such as with Biff's use of the time machine in Back to the Future II. But without cheats, it's always a gamble.)

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Only children believe in magic. You should done work and come to an understanding, then you wouldn't believe naive things.
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