Maybe you've heard of global supply chain shortages, covering all manner of chips and other components? And a pandemic producing sudden changes in demand, as

Meanwhile, mining hardware demand depends on cryptocurrency prices, which go up and down like a yoyo. Only a food would invest billions in a new chip plant when demand might have collapsed by the time it's finished.

Cryptocurrency was and is volatile enough that the correct play is to not build out long-term capacity for what very well could be a flash-in-the-pan phenomenon.

Last crypto boom crashed leaving manufacturers high and dry. Nvidia had a 9-figure write-off IIRC.

Is there any good article on that topic?

Production of something that complex isn't trivial or quick to ramp up, nor is there an unlimited production ceiling. And that's a problem, because there is effectively an unlimited demand for cryptocurrency mining equipment compared to other GPU markets.

I might buy the latest GPU to play PC games at max detail. But there's no increase in value in me buying 20 GPUs so there's effectively a cap on how many GPUs the gaming market will demand. Same goes for other use-cases like scientific computing. In those cases ore GPUs do allow them to solve harder problems or finish calculations faster, but buying more GPUs is more expensive so eventually scientists hit the limits on their budgets.

Cryptocurrency mining is different though since it provides a direct path to turning more computing power into more income. As long as the marginal costs to mine on a GPU are below the expected return and the payback time for the fixed cost of buying the GPU in the first place isn't too long, it nearly always makes sense to buy more GPUs. To put it another way, if it makes economic sense for me to mine on 1 GPU, it makes sense for me to mine with 10, or 100, or 1000. In fact it probably makes more sense to mine with more GPUs since there are economies of scale involved. And since miners are more concerned with their marginal costs than the fixed costs, even huge increases in GPU prices don't alter their behavior much. As long as you're making money running a card, who cares if the payoff time for it increases a few months?

I've read that takes 2 years to get a new semi-conductor fab up and running. While demand for GPUs has skyrocketed not only in crypto but in other areas.

Couple that with us going into 2 years of global lockdowns and subsequent supply disruptions have probably exacerbated the situation greatly.

It takes two years under normal circumstances; from what I understand backlogs for the lithography equipment are a huge bottleneck in the industry since there are only a few companies that make such specialized machines. They were already backordered for years pre-pandemic, with most of those getting pushed out because of supply constraint issues.

We’re never going to return to the level of industrial output pre-Covid. There are a dozen high-likelihood scenarios down the pipe in the 2020s (Russia, China/Taiwan, climate drought / famine, etc) that will continue holding global productivity down. We’re looking at global stagflation for most of the rest of our lives as a result, meaning crypto is a good hedge. NVidia just needs to start pricing its top-tier GPUs for crypto farms, then refurbishing the last generation for consumers when the crypto farms upgrade.

If Ethereum moves to PoS, half the crypto GPU market goes poof in an instant. Not a good thing to hedge more chip fabs on, I would bet.

It will move from one to another coin and profitability will decrease slightly unless supply induces demand.

Exponential growth outgrows any supply, so that's a possibility

You are basically advising them to be crypto bulls.

Isn't the complexity of the hash challenge designed to match whatever production of computing gears in value?

everyone is competing for the fastest TMSC silicon and it takes longer than the amount of time so far to decide to build new capacity and then build it and then make products.