The supply chain costs behind the AI boom
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Harvard Business School professor Willy Shih argues in his new book "Where Does My Stuff Come From?" that the layout of global supply chains is driven by economic laws, and that tariffs only prompt manufacturers to move assembly to Vietnam or Mexico to avoid costs. He cites the failed Foxconn LCD factory plan in Wisconsin as an example showing that projects lacking a supporting supply chain are difficult to implement. This judgment addresses the problem of supply chain costs being overlooked amid the AI boom: the relocation and implementation of manufacturing stages are constrained by supporting supply chains, and tariffs alone can hardly change the layout.
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- The Verge · AIThe hidden supply chain costs of the AI boom
In this Decoder interview, Harvard Business School economist Willy Shih discusses his book Where Does My Stuff Come From? and argues that global supply chains are shaped by economics, so tariffs tend to push manufacturers to reroute production through places like Vietnam and Mexico rather than reshore it. He explains why China remains a manufacturing powerhouse through industrial policy, regional competition and heavy automation investment, and why the iPhone illustrates the difficulty of moving complex production.
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