The free market has a bit of a problem here: A new state of the art fab can cost many $Billions and takes a good 5 years to go into production. Not a lot of companies have this kind of cash on hand or the ability to wait that long to achieve profitability. Also much of the current fab capability (TSMC, Samsung for example) is located in some geopolitically unstable places (Taiwan, South Korea). There's lots of risk to the global economy here.

I think the point is more that there's an obvious remedy to demand being above supply: raise prices until demand drops.

But for some reason, this doesn't happen as much as you'd expect.

Isnt supply price-inelastic in the short term, so "30% above" is the same quantity at all price levels?

Demand is not inelastic so the 30% drops if the supply becomes more expensive as orders will be cancelled.