undercapacitynoun [ U ]
uk/ˌʌndəkəˈpæsəti/usECONOMICS, PRODUCTIONa situation in which companies in an industry are making and supplying fewer products than customers buy or are expected to buy:
Given the attractiveness of the venue, this undercapacity can be expected to continue in the medium term.
Compare
overcapacity