Baker says there hasn't been a true semiconductor capacity cycle since the late nineties due to TSMC smoothing supply.
“We haven't seen a true capacity cycle in semis arguably since the late nineties. And that's because Taiwan Semi has been so good at aggregating and smoothing supply.”
Baker says Jensen Huang visits Taiwan Semi quarterly wanting capacity doubled or tripled but they only expand 5%.
“And so they're just simply not expanding capacity as fast as Jensen wants. Jensen goes there every three months and, you know, maybe they expand, you know, 5%. He wants them to double or triple.”
Baker believes NVIDIA could sell $1.5-2 trillion in chips if TSMC expanded capacity, but constraints prevent bubble.
“NVIDIA could probably sell $11,520,000,000,000 worth of chips next year. I really believe that. But the other side of that might be very painful for everyone.”