Why is there a chip shortage?
I don&#x27;t get it.<p>My mental model is this:<p>In 2019, all the fabs combined made $X chips per year, and projected a growth of $delta_X for the next year.<p>By the end of 2020, $X + $delta_X is significantly less than the actual demand.<p>There are only three possible expectations:<p>1. The fabs made less than $X + $delta_X chips<p>2. There has been an explosive growth in sales of existing electronic devices exceeding $delta_X that either surprised the OEMs or that OEMs failed to communicate to the chip fabs by booking extra capacity in advance.<p>3. All fabs are not equally equipped to handle fab demand. If an OEM changes to a different fab vendor:<p>3.a. Some other OEM was denied capacity at the new vendor<p>3.b. The capacity that was opened up at the old vendor isn&#x27;t usable by the OEM that got dropped by the new vendor<p>Has anyone done a deep dive and done the math to see how much capacity shortage was due to #1 and #2?<p>Apple famously moved a huge amount of their chips from Intel to TSMC when they made the m1 Mac. Intel has traditionally only used their fabs to make their own chips - so the OEMs that got dropped at TSMC couldn&#x27;t just take their business to Intel to rebalance the available fab capacity.<p>Does the amount of m1 macs made&#x2F;sold help explain the difference that #1 and #2 can not explain?<p>Is there another equally interesting story in the chip fab business that would explain this shortage?