> Do they think that this is a temporary spike and building capacity would be unprofitable?
Ayup.
A lot of the previous decades of chip manufacturing is all about how superior it is to be a "fabless" company. You don't have those nasty capital expenditures and your upside is basically unlimited--while owning a fab means you have to employ a ton of people and your profit margin is effectively capped.
The fab folks know that as soon as this shock is over, owning a fab goes back to being crap. So, you make hay while the sun shines, and you don't even think about doing capital outlays.
Even if they could find the equipment and people (not at all an easy thing), there is ZERO incentive for the fabs to expand. To first order, it's actually more profitable for them to maintain this shortage. Nobody is going to pass up a sale just to keep a shortage going, however.
Eventually, things will equilibrate. However, I suspect that there's going to be a lot less choice in semiconductors for quite a while afterward.
The only short-term thing that I'm interested in tracking is how many companies were hoarding and are going to panic now that inventory tax is coming due. That's going to move some commodity microcontrollers back into the system from the hoarders. It will be interesting to see how much comes back into the system in the next quarter or two.
Ayup.
A lot of the previous decades of chip manufacturing is all about how superior it is to be a "fabless" company. You don't have those nasty capital expenditures and your upside is basically unlimited--while owning a fab means you have to employ a ton of people and your profit margin is effectively capped.
The fab folks know that as soon as this shock is over, owning a fab goes back to being crap. So, you make hay while the sun shines, and you don't even think about doing capital outlays.
Even if they could find the equipment and people (not at all an easy thing), there is ZERO incentive for the fabs to expand. To first order, it's actually more profitable for them to maintain this shortage. Nobody is going to pass up a sale just to keep a shortage going, however.
Eventually, things will equilibrate. However, I suspect that there's going to be a lot less choice in semiconductors for quite a while afterward.
The only short-term thing that I'm interested in tracking is how many companies were hoarding and are going to panic now that inventory tax is coming due. That's going to move some commodity microcontrollers back into the system from the hoarders. It will be interesting to see how much comes back into the system in the next quarter or two.