One little village in the Blue Ridge Mountains’ foothills, decimated by Hurricane Helene, provides almost all of the world’s supply of a mineral essential to the manufacturing of semiconductors.
It’s been almost a week since Hurricane Helene devastated Spruce Pine, North Carolina, leaving the community of 2,200 residents without electricity or running water. Local officials claim that there is significant damage to the area’s roads and railroads.
The finest kind of quartz in the world is produced at Spruce Pine mines and is essential to the production of chips.
The town’s extremely precious high-purity quartz supply is currently under jeopardy, endangering the $600 billion worldwide semiconductor sector.
The Spruce Pine natural tragedy underscores the persistent volatility of global supply networks, over four years after the Covid-19 pandemic made Americans realize how reliant they had grown on imported products.
The high-purity quartz in Spruce Pine is extracted, refined, and exported to manufacturing facilities largely located in China and other areas of Asia by two companies: Sibelco and The Quartz Corp.
After that, a large portion of the highly pure, polished quartz is used to make crucibles, which are containers for melting silicon and shaping it into the wafers that are used to make semiconductors.
But for the time being, shipping, refining, and mining are all on pause.
The storm, which poured more than two feet of rain in Spruce Pine, prompted Sibelco and Quartz Corp. to suspend operations on September 26, according to the National Weather Service.
According to the firms, there is still no set schedule for when they anticipate returning to regular business.
“The community of Spruce Pine has been particularly hard hit,” Sibelco stated in a statement on September 30. “In response to these challenges, we have temporarily suspended operations at the Spruce Pine facilities.”
In a statement released on October 1, Quartz Corp. stated that it was “not sure” when it would be able to start operations.
It is impossible to overestimate the difficulties that the semiconductor industry would face if the Spruce Pine mines were to be permanently disrupted, according to experts.
CEO of TECHCET Lita Shon-Roy, who has spent more than 20 years researching the quartz supply chain, stated, “At this moment, this is the only plant in the world that serves the semiconductor industry in its entirety.” “This could completely upend the industry if something were to happen to these mines.” There isn’t another option.
According to experts, the question of what occurs next is twofold. Operators must first ascertain if any harm has been done to the machinery used by the enterprises to extract or refine the material, or to the actual quartz mines.
Given the condition of some of the infrastructure in western North Carolina, the secondary concern is how either business can get refined quartz to export markets if mining activities can resume.
According to TECHCET, it may take four to six weeks for the businesses to resume operating at full capacity. However, as both businesses mostly depend on trucks to transport their materials, Shon-Roy notes that this prediction is contingent upon the roads reopening.
Early indications, however, indicate that transit infrastructure will require considerable reconstruction.
According to Spencer Bost, the executive director of Downtown Spruce Pine, a nonprofit organization that collaborates with the city, “roads are gone.” In certain parts, he continued, “The roads just don’t exist anymore.”
Bost stated, “It’s not like power lines are down — telephone poles are gone” with regards to electricity. However, there are still two bright spots for the semiconductor sector.
The first is that high-purity quartz is probably kept in stock for the components it aids in the creation of. According to Shon-Roy, this might provide the sector with a two- to three-month buffer as Spruce Pine rebounds from Hurricane Helene.
Demand has been somewhat muted while the semiconductor sector recovers from its own crisis, according to Shon-Roy. In addition, most businesses have been maintaining bigger stock levels ever since the epidemic.
According to Shon-Roy, “that will help cushion the delay in getting these plants restarted.” An additional benefit is that quartz may be used to make crucibles that last for around two weeks, or 300 to 400 hours, before they need to be changed.
This information comes from Dustin Mulvaney, a professor of environmental studies at San Jose State University who specializes in solar energy commodity chains.
There may thus be a delay before chip makers start to suffer for more. But there is a chance for interruption when they have to replace the crucibles, according to Mulvaney.
The effect will increase with the amount of time it takes for the mining sector in Spruce Pine to resume operations. “A month’s notice is not too bad,” Shon-Roy remarked. “Two months is starting to get hard. Three months turns into a significant issue.
