If it is not physically possible, this decision makes a lot of sense. Due to the global semiconductor shortage it simply is not possible to build more on the scale customers would like to.
That’s on the order of years for this problem. I would imagine that Nvidia doesn’t think it could survive the reputational costs of charging market clearing prices for their cards for years - effectively proscribing their core gamer market for the entire period.
Sure, that’s what’s happening now, but it’s the fault of scalpers not a business decision by Nvidia. The scalpers get the ire of the core market, and Nvidia gets to look like it’s doing its best (while guaranteeing all the inventory it can make will sell)
It’s the same reason your favorite band charges a low face for tickets that doesn’t reflect demand - they don’t want to be the bad guy excluding poor people from the experience, they just let the scalpers do that.
Apple outbid everyone (and given their budget, will continue to do so.), so the rest of them are fighting for whatever capacity is left.
TSMC is expanding, but new factories take years to build.
So the issue here is mostly the overreliance of whole world on TSMC and Samsung.
Everybody else, is in the same boat as Nvidia. So this is the norm not the exception.
And NVidia is not in a mess, they are having record profits.
I think Nvidia could borrow or raise basically any amount of money if they had capital-intensive projects to invest in that would solve current or future supply constraints. Retained earnings are not the only way a company can invest in itself.
The problem isn't capital, its fundamental inelasticity of supply for semiconductors. Fabs (or capacity in fabs) can't be spun up or down quickly, nevermind cheaply.
People who insist that prices are the only control point tend to be those most unfamiliar with the practical dimension of finite resource distribution.