> This is... exactly what everyone expects, and the assumption of every economic graph in the world?

There are actually markets where the opposite holds. Basically anything with high fixed costs, because the more units sold, the less of the fixed costs each unit has to cover.

But fabs don't really work like that because, while very expensive, they have finite capacity. A fab that can produce a million units costs a billion dollars. If you want two million units, that'll be two billion dollars and be available a few years from now. And if you build more capacity than there is demand, you're bankrupt. So they purposely build somewhat less than expected, which when demand is higher than expected results in much more demand than supply.

The second fab on an identical process node is cheaper than the first.

Sure, but it's not as if the first one is a billion dollars and the second is a nickel. The numbers are of approximately the same order of magnitude.