Only in the most naive sense.

If it costs you $1B and five years to build out new supply and you think demand will not sustain for more than three years, it does not make sense to expand supply.

Instead you will maintain your margins currently and await demand to decrease back to your current supply.

This is pretty common and as others have pointed out is even more common in markets where competition is slow and lead times are long.

Ammunition is a great example over the last decade or so as political turnover caused relatively short lived demand spikes and manufacturers didn't expand supply because they knew once political winds shift, demand would decrease.