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There is no new supply. There doesn't need to be. The demand is alleviated by it absolutely cratering. I don't understand why this is confusing.
Please indicate the point at which we no longer agree.
The price of consumer hardware, like RAM and SSDs, is high right now.
Supply for consumer hardware is low right now.
The reason that the price of consumer hardware is high right now is because supply is low.
The reason this supply is low is because manufacturing capacity that used to be committed to consumer variants of this hardware has been converted to manufacturing datacenter variants of this hardware.
The reason for the manufacturing shift is that, because of the AI bubble, demand for datacenter hardware is high.
It takes time and money to convert manufacturing capacity between consumer hardware to datacenter hardware.
This conversion also includes changing investment, R&D, and employment priorities. Companies like Micron (one of the three major/noteworthy memory suppliers in the world) have cut/gutted their B2C divisions to focus their resources entirely on the more profitable datacenter B2B efforts.
Datacenter variants of this hardware are substantially different than consumer variants and are not interchangeable.
Higher prices, slimmer margins, and lower sales have caused some consumer electronics businesses to cut back, focus on narrower market segments, pivot to other markets, or exit the market entirely.
If we agree on all of the above, I'm not sure why you are confused.
If the bubble pops today, it very well may cause demand for datacenter hardware to crater, assuming they don't get creative and find a way to pivot hard toward other SaaS somehow. Since the parts are not at all compatible with consumer electronics, this would not provide an instant increase in consumer hardware supply nor would it crater consumer hardware demand.
If the crash is bad enough, some of the businesses that pivoted to B2B/datacenter hardware may fail or have to be bailed out by their governments. Even if they all survived, fewer consumer product businesses exist in the market to sell to consumers and they have fewer product lines in development. Companies like Micron, who abandoned their established brands and/or relationships with resellers or partners that would use their parts in consumer products, will need to rebuild those things. Manufacturing would need to be converted, updated to the latest consumer hardware needs, taking more time and money.
It would take quite a while to rebuild consumer hardware supply. Without that supply, demand will not be met and prices will be high.
Some of it has. Not all of it (except for Micron).
It doesn't have to. It seems we both agree that server hardware demand clearly impacts consumer supply, and yet for some reason you seem to think this is a one-way street?
And yet, they did it, very quickly, and will do so again when the market shifts again.
These aren't typical conditions. There is a world of difference between "Yo, here is a truckload of money. Give me all your RAM for the next two years!" (AI right now) and "We need to align our capacity to the current needs of the market in order to not flood the market with product we can't sell." (normal conditions).
Look at the memory market before this AI shitshow. It's cyclical as the fabs try to match demand without flooding the market. It typically takes several quarters to ramp capacity up and down, causing shortages and then oversaturating the market because they can't do it fast enough. Returning to that kind of production is also likely to be more difficult than it would otherwise be to adjust while already in it. There are so many unknowns in this wild situation. How much DRAM should they commit to making?
Anyway, I'm not even a business person so what the fuck do I know. I'm getting tired of this conversation. It would be great to be optimistic, but that's not something I'm capable of right now. Best of luck. I hope it pops and prices plummet.