And if they invest in new fabs and the bubble doesn't pop then they make a whole lot of that money they're in business to make.

The incentives here are naturally very well aligned with solving the shortage. If doing nothing is likely to solve the shortage, then they'll do nothing. If increasing supply is likely to solve the shortage, then they'll increase supply. If there's a 50/50 chance of both, then some will increase supply and some will do nothing, and the market will reward whichever group was right and punish the other.