> Manufacturers choosing not to scale with demand or not being able to scale with demand
In a vacuum, that would make sense.
But looking at how the industry works, the number of defunct companies, and how the whole industry got concentrated on the conservative companies, you start to understand that the reason they still exist is mainly because they don't ride fad waves.
It's not like chip manufacturing is a spot instance on AWS that you spin up and down when needed; these are multi-year, multi-billion dollar investments that require long-term demand studies. The AI approach of requesting a whole fab of demand for the next 5 years with a letter from Jason Hwang that says "trust it, bro" does not bring as much confidence as it appears.
In a vacuum, that would make sense.
But looking at how the industry works, the number of defunct companies, and how the whole industry got concentrated on the conservative companies, you start to understand that the reason they still exist is mainly because they don't ride fad waves.
It's not like chip manufacturing is a spot instance on AWS that you spin up and down when needed; these are multi-year, multi-billion dollar investments that require long-term demand studies. The AI approach of requesting a whole fab of demand for the next 5 years with a letter from Jason Hwang that says "trust it, bro" does not bring as much confidence as it appears.