Yes they are going to ramp up capacity. It would only make business sense to do nothing if all your competitors were also doing nothing, which would probably require some level of illegal collision.

If everyone ramps up then in the best case everyone has the same sized slice of a bigger pie. So in theory it makes business sense. But the more realistic possibility is that you end up with oversupply, crash the market and everyone loses. This is what normally seems to happen with DRAM.