Nontrivial markets don't behave like Economics 101 textbook examples.

Samsung, SK Hynix, and Micron have a combined market share of 90% - with most of the rest being a very new-to-the-market CXMT. It is a cutthroat market which behaves like a stereotypical "pork cycle". Semiconductor fabs cost billions to build and take years to complete, so you better be damn sure you have buyers before you start constructing one. You and your competition overestimated the demand? You have to pay back the construction cost, so you're now in a race to the bottom and one of you is going bankrupt.

Ever wondered where Intel came from? They started out as a DRAM manufacturer, which dominated their revenue well after the introduction of their first microprocessors. But in the early 1980s the glut of supply from new Japanese manufacturers made it so unprofitable that they had to ditch the memory market altogether. The stories of Texas Instruments and Motorola aren't much different. And that's not even mentioning the likes of Mostek, which once held a 85% market share and was dead less than 5 years later! Oh, and those Japanese manufacturers? All gone, pivoted like Intel or died like Mostek.

So no, the three remaining DRAM manufacturers aren't going behave like headless chickens and start ordering new fabs just because there's a bubble causing a temporary demand peak. Unless those AI companies are going to pay in advance, in cash, for an entire fab, they'll just have to wait and deal with the price increase.

Corn is heavily subsidized,also has (in the US) federally prvided insurance programs against plunging prices, has paid uselessness(ethanol). Despite all of this corn has caused massive agriculture bankruptcy/takeover when it has failed anyway.

So it's more "what's special about corn". It is also fairly hilarious to claim the parent is denying basic economics and then bring up corn as an example of having successfully managed economics. If the scales were not being thumbed, and "basic economics" were in play, corn would be in very very bad shape.

In the case of DRAM, there is an incredibly long history of these gloom/glut cycles, and they have stayed roughly the same timeframes (~3 years) since the 1990's.

Almost all the ones who have survived this long are either in the same kind of boat as corn - protected in various forms from the downside - or don't increase production and get caught out until they are absoultely forced.

The very temporarily increased profit is not worth going bankrupt for - they make more money long term by being very cautious and know this.

There are a near infinite number of economic studies you could look at (and several sibling comments cite some) - DRAM manufactuers don't chase the price and probably couldn't anymore if they want to.

None of this denies basic economic theory, of course, since economic theory is not exactly "rigorous", even to the degree it could be (IE even the parts that are pure analysis of data rarely reproduce!).

It takes a billion dollars and years to produce a new chip fab line. So no, it cannot just be produced for you on a dime.

The capital investment needed to bring new chip fabs online and to staff them is likely orders of magnitude higher than that needed to buy land to grow corn on. And then the ratio of investment to sell price on that land + infrastructure is probably significantly worse for chip fabs that potentially aren't needed to satisfy demand anymore a few years from now.

"If the price is high enough" is of course technically true, but the scale of what high means in this context is important.

>Commodities like corn have been managing this for a long time… what’s special about chips?

Chips aren't grown, for starters. They require very expensive facilities that take a long time to plan, build and start up. And ag firms are not seeing their stock price skyrocket based on the assumption that they will show exponential revenue growth every quarter, so there's no incentive for them to overbook their capacity and hope for the best. Maybe if the population was doubling every six months, you'd see something similar in corn. Prices in the real world are not perfectly elastic, and big deals are often locked in long before actual production.

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