Semiconductor lithography is a lot more expensive than plain old manufacturing. Fabs cost tens of billions of dollars to build or expand and have limited capacity, coating a glass disc in rust is cheap.

Also, fabs have investors who want returns on their money, so they're not super keen on crashing the market either. There are not-so-secret cartels between all the major players that conspire to keep DRAM and NAND prices high.

We could certainly have the government dump a half-trillion dollars and bring up a bunch of fabs though. That's exactly what China is doing. Their economy runs on assembling the goods, not lithographing the chips (which is largely done in Taiwan or South Korea or sometimes Malaysia).