[paol]

They don't need to expand capacity to fulfill this contract.

They would want to expand capacity if they believed this increase in demand is long lasting - the implication is therefore that they don't believe it, or not enough to risk major capital expenditures.

You saw the same with GPU makers not wanting to expand capacity during the Cryptocurrency boom. They don't want to be left holding the bag when the bubble pops.

[davey48016]

Oil has been like that as well. High oil prices don't trigger nearly as much drilling as they used to.

https://www.cbsnews.com/news/oil-production-prices-us-compan...

[whaleofatw2022]

Part of that equation, FWIW, is that certain countries would flood the market with supply to make any new projects suddenly unprofitable.

Which sucks extra bad because if you shut the project down but start it back up you can't just flip a switch. Gotta put together a whole new team and possibly retrain them.