Oversupply means a few of the suppliers will not be able to sell their chips and might face bankruptcy, leading to monopolies in a decade or so when the pendulum swings back again. Don't worry too much about it though, it's difficult to predict the future and it's equally possible that the market will return to relative balance without overcorrection.
There are not going to be any bankruptcies even in a severe oversupply situation. Chip manufacturers are much higher margin and better capitalized than in the past, and a lot of the riskier capacity expansion this time around has been financed by customers
I can’t think of any more major consolidation that can take place. Maybe within NAND, but for different reasons as there’s not really risk of a long lasting supply glut in that market.
Governments have/may start seeing chipmaking as something of national security, right? So would they let a great amount of consolidation occur or will every continent have its own heavily subsidized chip industry
Temporarily, perhaps. The risk is that without planning that oversupply leads to a period of greater shortage due to cancelled production, bankruptcy etc.
Isn't that obvious? If there is an oversupply of GPU, as a customer I win. If there's an oversupply of some niche ARM chip I might not win but I'm not losing either...
I don’t know if there will be an “oversupply” of GPUs, because now they are all manufactured at foundries and the chip companies can just cut their orders. But with Intel coming into the market, Samsung switching to TSMC, and TSMC putting in $120b of capex, the shortage should be alleviated pretty soon.
If there's an oversupply of GPU chips _and_ everyone builds them into products and sells them. There's a fair amount of demand in that specific instance but that doesn't translate into capacity for everything else and companies aren't going to be quick to lower prices.
To give a real world example of how the chip shortage is affecting me...
The vehicle I want to buy does not come with the chip for heated seats or parking sensors, because they simply do not have enough of them. You can buy that vehicle without those features, and at least with the heated seats, they promise to retrofit them "at some future date." All of the models that got made before the cut-off sold super quickly, and I'm just waiting to buy until the vehicle is complete at signing.
> Because if they wanted them they would buy them?
Only if they can afford them and can justify the purchase. People want many things that for various reasons they don't acquire. It may be cost (units would have to be sold at a loss to get down to consumer-comfortable pricing), it may be that it's part of a larger system. For me to get a new AMD CPU I'd also need a compatible motherboard and, possibly, different RAM (either for physical compatibility or to get an actual performance improvement, even if my old RAM "works" if it's sufficiently slow it's a bottleneck that makes the purchase not worthwhile to me).
