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AnthonyMouseyesterday at 9:12 PM1 replyview on HN

If they gradually increase production capacity then prices stay high for 10+ years (or for as long as it takes for demand to crash) because a gradual increase in production takes that long for them to add enough capacity for current demand.

If they add enough capacity to meet current demand quickly then if demand crashes they still have billions of dollars in loans used to build capacity for demand that no longer exists and then they go bankrupt.

The biggest problem is predicting future demand, because it often declines quickly rather than gradually.


Replies

DoctorOetkeryesterday at 11:39 PM

do we have evidence of RAM manufacturers going bankrupt? do we have evidence that the increased capacities after the mentioned past shortages went unused or were operated at a loss?

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