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Back to The hidden supply chain costs of the AI boom, with Willy Shih.

How Does Willy Shih Size Up a Foxconn Plant?

Willy Shih says he sizes up a plant from first principles: once Foxconn was not going to build a glass plant across the street in Wisconsin, an LCD factory there was not going to exist.

A panel factory needs a stable floor, so the site has to include the structural steel and the concrete that hold it still. After an earlier Decoder conversation, residents went to the town zoning hearings, sent him the plans, and asked whether this would be a panel factory. He told them it would not. The drawings did not have enough concrete for one.

The Verge had already used him as a source on what it takes to build an LCD plant anywhere, not only in Wisconsin. The missing concrete was the tell.

Grokipedia·Foxconn

Transcript

The hidden supply chain costs of the AI boom ·

Decoder with Nilay Patel

More from this episode

  1. How Do Manufacturers Get Around Tariffs?Willy Shih says manufacturers get around tariffs by moving the work, usually the final assembly, to a country the tariff does not hit.
  2. Can Tariffs Bring Manufacturing Jobs Back?Willy Shih says tariffs do not bring ordinary manufacturing jobs back, because the United States is a high-cost country and a returning job has to pay for…
  3. Why Is the iPhone Still Assembled in China?Willy Shih says the iPhone is still assembled in China because the phone needs a huge manual workforce, and China is where that many people can be put on a…
  4. Why Is China Still the World's Factory?Willy Shih says China is still the world's factory because provinces and cities compete to make better products at lower prices, and the factories spend…
  5. What Is the Chicken Tax on Imported Trucks?Willy Shih says the chicken tax is a tariff on imported light trucks, and it is a reason Detroit's profits sit on trucks and SUVs.
  6. Why Is the AI Boom Making RAM More Expensive?Willy Shih says the AI boom is making RAM more expensive because demand for memory chips has run far ahead of what the factories can produce.
  7. Why Is Algerian Oil Cheaper to Ship Than Texas Oil?Willy Shih says Algerian oil is cheaper to ship to New Jersey than Texas oil because the United States does not build the supertankers the Jones Act requires…

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