I hear you man, but guess what, I'm not a supplier, so again: qui bono.
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.
You're looking at it purely from the short term perspective of say GPUs, cars etc. as a consumer. Sure, a short term oversupply to drive prices back down to a sane level (or even below sane for a little while) would be a good and healthy thing. That's coming.
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.
The bullwhip effect, the wikipedia page on it is pretty good, has nothing to do with the economy per se. I don't think we have seen it at display as big, as long and as global in my life time. My professional opinion is that a lot can simply attributed to disrupted supply chains and an overall bullwhip effect.
Over supply lead to consolidation. The weak get acquired. There are currently only 4 legit foundries, a legitimate crisis could turn that into 2 or 3. The less competition there is the more market failures there will be.
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.