Additionally, their lack of planning and foresight contributed to the larger semiconductor industry going into a panic, causing a purchasing frenzy that dried up all the channels.

People in the larger industry saw what happened with the automotive semiconductor segment and went, well... maybe I should just keep 1 year of all my critical ICs on hand just to be safe.

I agree with you that we need more fabs, but they need to be thought of as (from a US centric viewpoint) national security assets. The reality is that if we want significant infrastructure, we need to do major investment from the US Government to ensure they are built here in the US. There are either production minimum guarantees, subsidies on the construction or operational costs to basically cover the costs of having excess capacity.

I think it's also disingenuous to continue to refer to increased demand as shortages because the implication is that there was a shortfall in production. The reality is that there was an increase in demand and limited capacity.

Overall I'd say you're right. Capacity has so much inertia that it lags beyond the created demand. That isn't the fault of the foundries, it's just an artifact of unpredictable market behavior.