What the extremely ambitious fab expansion plans have to say about the prospect of a market crash?

[Paul2]

What the extremely ambitious fab expansion plans have to say about the prospect of a market crash?

Signal I see:
1. no way out, but to up rates for developed nations
2. obvious consumption crash
3. capital flight
4. debt load on big companies
5. overproduction crisis in China

It feels so oddly 1924

 

[DaRAGingLunatic]

I was watching a youtube about china last night. Since the tarrifs lots of factories are getting zero orders and closing down. But that was clothes factories etc, not semiconductor factories

 

[Barnsley]

I was watching a youtube about china last night. Since the tarrifs lots of factories are getting zero orders and closing down. But that was clothes factories etc, not semiconductor factories

You cant always be the cheapest!

At some point the people have some aspirations to do better in life.

I know thats not popular on here and people should know their place and just do grunt work for peanuts.

The Govt in China does have a lot of mouths to feed though , the challenge is how to do it without bankrupting the country?

 

[Paul2]

The Govt in China does have a lot of mouths to feed

It really doesn't, previously it did both an unthinkable levels of currency debasement, and paid the double digit percentage of government workers less than what you need to buy one pancake per day, in times of crisis.

 

[Barnsley]

It really doesn't, previously it did both an unthinkable levels of currency debasement, and paid the double digit percentage of government workers less than what you need to buy one pancake per day, in times of crisis.

Is the CCP not the primary provider in China?

 

[Paul2]

Is the CCP not the primary provider in China?

It is, but it's free to not to provide anything

 

[Paul2]

For semi people: last few node fabs were built with extremely overly optimistic profit per wafer expectations, and small market size for the node. They are kinda undersized on capacity, and they will have to start making wafers at much cheaper price much sooner than expected because the bonanza of extremely expensive, low volume enterprise chips has ended.

If the crash will come before these fabs will break even, no good.

What I see, there are a lot of relatively small fabs laid down for the bleeding edge at the same time, for multiple nodes forward. Some of them will complete only in 3-4 years.