How is oversupply a "crisis" (assuming you're not carrying water for board members)?
Would love to have a level headed conversation about this, assuming someone here can address, what is, in my estimation, a non-issue.
Would love to have a level headed conversation about this, assuming someone here can address, what is, in my estimation, a non-issue.
Having a glut of a product or resource destroys manufacturing capability as employees get furloughed, factories shut down, and talent is lost. ...it then creates a shortage when demand picks up and so on.
Markets are good at reacting if the future is predictive, but if it is unexpected, then there is damage in both shortages and gluts.
Importantly, the more complex and deep a supply chain is, the more unpredictable and magnified the bullwhip effect becomes, even when you expect gluts/shortages. This is because every participant in the chain attempts to cushion themselves from the shocks by stockpiling and timing their sales.
In spite of political, personal, or professional neglect, (don't care which one) chip companies are posting gargantuan earnings YOY and seem to be doing fine.
On the other hand, my sibling can't afford a car or a non-pre-built computer.
I guess it's not clear in your post, but who exactly are we looking out for here? The furloughed talent? The "market"?
And regardless, how is that my problem?
Again, I would love to have a level headed discussion about this, but please be honest about who truly loses in an oversupplied market.
BTW, because I see this here a lot: just because the whole "it's more complicated than you think" rationale is not a commonly accepted logical fallacy, doesn't mean that it's not bullshit all the same.
You're argument assumes we have anything close to a healthy economy now. And in another world, you'd be right. However, that not being the case, your argument is moot at best and disingenuous at worst.
However, what the article is talking about is the risk of a longer term oversupply situation at the foundry level. If that happens the result will likely be even more consolidation. The downside to you as a consumer would be lack of innovation and flat to higher prices over time.[1] Once you get below a handful of players in a market, the worse your options as a consumer get.
[1] see Intel CPUs for much of the 201X's
It's arguable that they've been doing a bit of this over the past couple of generations... it would get far worse in a chronic oversupply situation.
We end up richer on paper and poorer in reality.
Volume 1 Marx would say that the unused capital still represents a source of exploitation. Volume 2 Marx and beyond would say that the problem lies in the circulatory sphere and that it is the money capitalist that is threatening the productive capitalists.
However, the critical flaw of highly rational actors is that their actions always incur a reality tax, and, more likely than not, they're nowhere to be found when the bill comes.