Catastrophic effects of Hurricane Helene might lead to a pause in semiconductor chip production.
Nestled in the Blue Ridge Mountains, just outside the tranquil town of Spruce Pine with less than 2,200 residents, are two mines that produce the world's most pristine quartz. This quartz, which was formed around 380 million years ago, is a vital component in the global production chain for semiconductor chips, which power a multitude of devices such as smartphones, automobiles, medical equipment, and solar panels.
However, due to Hurricane Helene's recent rampage through the southeastern United States, operations at these mines have come to a halt. The storm resulted in historic flooding and landslides, disrupted roads, power lines, and services, putting millions of residents at risk.
Sibelco and The Quartz Corp, the companies responsible for managing the mines, temporarily halted operations on September 26 to prepare for the impending storm. However, it is unclear to what extent the mines were damaged, and how long it will take to restore their functioning.
The facilities, together with the rest of the town, have been hit hard by infrastructure disruptions, including flooded areas, power outages, closed roads, and poor communication networks. Adding to the issue is the difficulty in contacting local employees, whose homes and residences have been affected by the calamity.
According to supply chain experts, the mines may take several weeks to become operational once again, which could lead to semiconductor shortages and price hikes. This could be particularly detrimental to the tech industry, as Silicon Valley giants are currently investing billions of dollars in chips to power their artificial intelligence systems.
If you were to pick one mine complex that significantly impacts the semiconductor manufacturing faction and the solar panel industry, it would most likely be the Spruce Pine mines operated by Sibelco and The Quartz Corp, according to Seaver Wang, co-director of the climate and energy program at The Breakthrough Institute.
Spencer Bost, executive director of Downtown Spruce Pine, stated on Tuesday that the damage in the town is catastrophic.
“At present, we are not aware of the extent of damage to the mining companies. However, we have witnessed such devastation in Spruce Pine that it is questionable when our employees will be able to resume work. Many people are injured, homes are damaged or destroyed, and some roads are no longer accessible,” Bost remarked.
Sibelco, a major Belgian employer in the county, confirmed the safety of its employees and is working diligently to contact those still unreachable due to ongoing power outages and communication challenges. They have also been collaborating with government agencies and rescue operations to mitigate the impact of the disaster and return to normal operations as soon as possible.
The Quartz Corp, Sibelco's neighboring mine owned jointly by a French and Norwegian mineral company, expressed its concern over the hurricane's aftermath and stated that it is uncertain when operations might resume. Their focus is on ensuring the safety of their employees and their families as they work to contact the unreachable staff.
An indispensable element for a cutting-edge industry
Quartz is indispensable in the semiconductor manufacturing process. Its purity also plays a pivotal role to avoid damaging the chips.
“You are manufacturing exquisitely complex chips featuring, in some instances, 100 billion transistors, 100 billion miniature machines, on a single chip no larger than your thumbnail. The presence of a single atom out of place can result in a defect that ruins the entire chip,” explained Gregory Allen, director of the Wadhwani Center for AI and Advanced Technologies at the Center for Strategic and International Studies.
While quartz is abundant worldwide, the unique high-purity quartz mined in Spruce Pine represents approximately 80% to 90% of the global market. While some semiconductor manufacturers may have enough high-purity quartz on hand to sustain production, a longer stoppage of the mines would lead to prolonged semiconductor shortages.
In such cases, it would be possible to purify regular quartz as a substitute, but the global capacity for accomplishing this task in adequate quantities is limited.
“I would anticipate a stall and disruption in the supply chain for major chip manufacturers as they wait for these mines to reopen,” said David Bader, professor and director of the Institute for Data Science at the New Jersey Institute of Technology.
In addition to restoring the mines, local infrastructure, such as roads, would also be required to transport the quartz to customers. An extensive chip shortage would likely result in numerous industries grinding to a halt. For instance, during the 2021 global chip shortage caused by the Covid-19 pandemic, automotive manufacturers were left with nearly completed vehicles but could not ship them due to the lack of chips to power crucial features, causing car prices to increase heavily.
“The American economy, to a greater or lesser extent, is contingent on the semiconductor industry as a vital input,” said CSIS's Allen. According to Wang, despite the devastation in Spruce Pine, there remains reason for optimism.
"This mine holds significant national importance, and I'd bet that the feds are ready to raise hell and climb mountains to have it operational ASAP. It's no secret that this mining facility holds substantial value for our country." - statement from Wang.
The tech industry, particularly Silicon Valley giants investing in AI systems, might face semiconductor shortages and price hikes due to the potential prolonged closure of the Spruce Pine mines. These mines provide a significant amount of high-purity quartz, an indispensable element in the semiconductor manufacturing process, with over 80% to 90% of the global market relying on it.
