Hurricane Helene has affected the operations of two large companies based in a small town in North Carolina that mine a critical resource for the production of semiconductors and solar panels – high-grade quartz.
Spruce Spine, a location with less than 2,500 residents, is in the literal eye of the storm and has been hit by floods that have disrupted the operations of Sibelco North America and The Quartz Corp – the two corporations that operate the town’s quartz mining sites.
Generally, this wouldn’t be all that significant but these 2 companies control an astounding portion of the high-grade quartz used in the electronics industry.
Yinan Wang, a geologist, explains the unique formation of this resource: “The quartz in Spruce Pine formed deep in the Earth without a lot of water carrying in other impurities.”
This type of rare quartz is used on silicon wafers – the foundation of modern electronics.
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Ed Conway, author of “Material World: The Six Raw Materials That Shape Modern Civilization,” emphasizes the rarity of Spruce Pine’s deposits: “It is rare, unheard of almost, for a single site to control the global supply of a crucial material. Yet if you want to get high-purity quartz—the kind you need to make those crucibles without which you can’t make silicon wafers—it has to come from Spruce Pine.”
The global supply chain of smartphones, advanced AI systems, cars, tablets, and just about every other kind of popular consumer electronics could be put to the test once again, The industry’s ability to find alternative sources will determine how bad the problem may get.
Sibelco and The Quartz Corp Are Not Sure If They Can Restore Operations Shortly
The National Weather Service reported that over 24 inches of rain had flooded the Spruce Pine area, endangering locals across the area. It has been 5 days since the hurricane hit the shores of Perry, Florida and the full scope of the devastation is still unknown.
Spencer Bost, the executive director of Downtown Spruce Pine, the local business development association, provided a grim assessment of the situation: “It’s flooded up to the awnings, about 10 feet. Lower street was destroyed.”
The town’s critical infrastructure has been severely damaged by the strong winds and rain and locals have reported power outages, water supply disruptions, and fallen trees hitting buildings, houses, and roads, which has resulted in immediate isolation for the community.
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Both Sibelco and The Quartz Corp have been forced to halt their operations due to the hurricane’s activity.
Sibelco stated in a blog post published on its website: “The hurricane has caused widespread flooding, power outages, communication disruptions, and damage to critical infrastructure in the area. Many people in the area, including our employees and their families, are facing displacement and significant disruptions.”
“As of September 26th, we have temporarily halted operations at the Spruce Pine facilities in response to these challenges,” the statement added.
Similarly, a spokesperson for The Quartz Corp told NPR: “Operations at our facilities were stopped on September 26th in preparation of the event and we have no visibility on when they will restart.”
Transportation could also be a challenge. Even if the mines are still in condition to operate (which seems unlikely), the CSX rail line has suffered significant damage and needs to be repaired to resume shipments from within the two.
Not The First Time it Happens but Not The Same World Either
The Spruce Pine mines are considered essential for the production of high-end silicon wafers. Conway further commented: “Purity really does matter. You’re talking about a process to create the silicon wafers that later become silicon chips, where one single atom being in the wrong place could derail production.”
Solar panels rely heavily on pure quartz too. At a point when the world is turning to renewable sources of energy to combat climate change, the industry’s ability to supply these products is critical to reducing carbon emissions.
Johannes Bernreuter, head of Bernreuter Research and a solar industry expert, notes: “If a disruption went on for more than a few weeks, it would pose a serious problem for the production of silicon ingots needed in the photovoltaic, or PV, industry.”
The mines at Spruce Pine have already experienced disruptions. For example, in 2008, a fire at a local refinery impacted the global market. However, the tech industry’s reliance on semiconductors is now bigger than it was back then, which means that any issues with the supply of quartz could have more severe consequences.
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Industry experts do note that chipmakers may already own large stockpiles of highly pure quartz that could help them “weather the storm” – quite literally.
In this regard, Seaver Wang, a codirector of the climate and energy team at the Breakthrough Institute, suggests: “If the mines resume operations within a few weeks, the impact may be minimal.” However, if the disruption persists, the consequences could be severe. Wang continues: “If more serious damage occurred at the mines, then both the chip and solar industries could see supply chain shortages and price spikes.”
No Viable Alternatives to Spruce Pine in Sight
Although it is a bit hard to imagine, there are not many sources of pure quartz in the world – at least not as pure as the quartz that comes out of Spruce Pine. In addition, both the US and China have engaged in a race to secure access to critical raw materials needed to produce vital products for the semiconductor and renewable energy industries.
Lita Shon-Roy, the president and CEO of TECHCET, expresses surprise at the industry’s continued vulnerability: “Every time I’ve asked in the last two decades, the question always comes back, ‘Well, where else are we supposed to get it?'”
Although the crisis should result in expanded research and development efforts in this particular field, alternative materials that could replace quartz are still yet to be discovered. In addition, it would likely take many years to scale up production of those resources to match the capacity of the Spruce Pine’s mines.
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Meanwhile, when it comes to pure quartz, Shon-Roy notes: “I haven’t heard of any viable sources yet to replace what’s in North Carolina.”
The Tech Industry Continues to Be Vulnerable to Supply Chain Disruptions
The fragility of the high-tech industry’s supply chain has been once again revealed by the unexpected devastation caused a natural disaster. The event may prompt the entire industry and governments to reassess their strategy to secure these much-needed resources.
Semiconductors are not just important for the tech and renewables industries but also to the military, which means that the resumption of their operations may be considered a matter of national security.
China, which relies heavily on pure quartz imports coming out of Spruce Pine, may be observing closely how the situation unfolds. If the US declares that all output that comes out of the mine should first suffice domestic needs, that could create tensions between the two countries.
As recovery efforts continue in Spruce Pine, the most pressing concern is the restoration of basic services and infrastructure in the town and its surrounding areas. This includes repairing roads and bridges, restoring power and water supplies, rebuilding damaged homes and businesses, and ensuring the safety and well-being of local residents.
Once immediate safety concerns are addressed, the focus will shift to reopening the quartz mines. This process may involve assessing and repairing any damage to mining equipment and facilities, ensuring the structural integrity of the mines, and reestablishing transportation routes to start moving quartz out of the area.
Possible responses from the tech industry to navigate these challenging circumstances may include reevaluating their supply chain strategies to be more resilient, investing in R&D to find alternative materials or production methods, and exploring new sources of high-purity quartz in other parts of the world.
The disruption may prompt policy discussions at both national and international levels, focusing on critical resource management and security, disaster preparedness in areas that host strategic industries, and incentives for developing alternative materials or technologies.