[arnaudsm]

That's economical theory, but the real world is often non-linear.

Crucial is dead. There's a finite amount of rare earth. Wars and floods can bankrupt industries, supply chains are tight.

[tirant]

Those are all temporary events and circumstances.

If the market is big enough, competitors will appear. And if the margins are high enough, competitors can always price-compete down to capture market-share.

[jsiepkes]

Competitors will appear? You can't build a DRAM production facility in a year. You probably even can't in two years.

Also, "price-compete down to capture market-share"? Prices are going up because all future production capacity has been sold. It makes no sense to lower prices if you don't have the capacity to full fill those orders.

[scns]

> Crucial is dead.

Micron stopped selling to consumers to focus on the high margin enteprise market. Might change in the future.

[lotsofpulp]

The business that owns crucial is producing more chips than ever.

Rare earth metals are in the dirt around the world.

Supply and demand curves shifting, hence prices increasing (and decreasing) is an expected part of life due to the inability to see the future.

[mschuster91]

> Rare earth metals are in the dirt around the world.

They are. The problem is, the machinery to extract and refine them, and especially to make them into chips, takes years to build. We're looking at a time horizon of almost a decade if you include planning, permits and R&D.

And given that almost everyone but the AI bros expects the AI bubble to burst rather sooner than later (given that the interweb of funding and deals more resembles the Habsburg family tree than anything healthy) and the semiconductor industry is infamous for pretty toxic supply/demand boom-bust cycles, they are all preferring to err on the side of caution - particularly as we're not talking about single billion dollar amounts any more. TSMC Arizona is projected to cost 165 billion dollars [1] - other than the US government and cash-flush Apple, I don't even know anyone able, much less willing to finance such a project under the current conditions.

Apple at least can make use of TSMCs fab capacity when the AI bros go bust...

[1] https://www.tsmc.com/static/abouttsmcaz/index.htm

[m4rtink]

Aren't rare earth metals used mainly for batteries, not chips ?

I guess people might be mixing up all the headlines of all the articles they did not read by this point.

[mschuster91]

Chips also need rare doping materials, plus an absurd level of purity for the silicon. The problems are the same no matter if we're talking about chips or batteries.

[bmacho]

It's not even the economical theory. Supply should not increase to increased demand. They want more profit, and if less supplies is what accomplishes that, they will absolutely keep the supplies constant and manufacture a scarcity. This is the economical theory.