I have fairly simplistic view of the economics involved here. Could you explain why the ability to sell more chips wouldn't be sufficient enough incentive to increase supply?

Not the person you’re replying to, but RAM has historically been a boom-or-bust business, and companies that invest to meet demand during a boom cycle usually have that new capacity come online just in time for the bust.

If it was just variable costs and new capacity was available today they’d do it. But there are substantial fixed costs and delays to increasing capacity, and that uncertainty makes it risky.

Let's imagine you're drilling oil instead. You have to spend billions of dollars over years finding and developing a new oilfield to make any profit back. And once you have it, you have to continuously spend enormous amounts of money to keep producing it, which means your effective price floor is higher than the current stable price.

Now it's 2021 and someone gets a tanker stuck in the Suez, sending the price of oil sky-high. How long does the ship have to be stuck before you spend those billions of dollars on a bet that it'll recoup before someone gets the ship out?

Bringing on new fabs takes many years and billions of dollars. You're exposing yourself to a lot of risk if you build now and find that the gold rush is over by the time your new capacity is online.