Overcapacity is good though
It means there's capacity to try new things, and to cover failure.
When all the fabs are running full-tilt, any tiny drops in yield or small failures become total disasters for the downstream customers as they suddenly have their orders delayed or cancelled outright.
That kills product lines, and small companies.
If the fabs have some slack, then such issues can be absorbed, and when everything is running smoothly, the fabs can experiment - both in product design and manufacturing processes.
Slack is absolutely necessary to the long-term profitability of a company.