Helene quartz mine damage threatens semiconductor chip industry

Virtually all of the world’s supply of a mineral that is critical to semiconductor production comes from one tiny town in the foothills of the Blue Ridge Mountains that has been devastated by Hurricane Helene.

Spruce Pine, North Carolina has no running water or electricity, more than a week after Helene ripped through the town of 2,200. Roads and railways in and out of the area are severely damaged, according to local officials.

Mines in Spruce Pine produce the world’s purest form of quartz, which plays a central role in chip manufacturing.

Now, the town’s exceedingly valuable supply of high-purity quartz is at risk, threatening to cripple the $600 billion global semiconductor industry.

The natural disaster unfolding in Spruce Pine also highlights the continued instability of global supply chains, more than four years after Covid-19 drove home to Americans how dependent they had become on imported goods.

Two companies, Sibelco and The Quartz Corp., extract the high-purity quartz in Spruce Pine, refine it and export it to manufacturing facilities based primarily in China and other parts of Asia.

Much of the refined, high-purity quartz is then used to create a vessel called a crucible, which holds silicon as it is melted and transformed into the wafers on which semiconductors are made.

But mining, refining and shipping are all on hold, for now.

Both Sibelco and the Quartz Corp. were forced to halt operations on Sept. 26 due to the storm, which dumped more than two feet of rain on Spruce Pine, according to the National Weather Service.

The companies say there is no timeline right now as to when they expect to resume normal operations.

“The Spruce Pine community has been hit particularly hard,” Sibelco said in a statement on Sept. 30. “We have temporarily halted operations at the Spruce Pine facilities in response to these challenges.”

The Quartz Corp. said in an Oct. 1 statement that the company has “no visibility” as to when their operations will be able to resume.

For the semiconductor industry, the challenges that any long-term disruption to the Spruce Pine mines would present cannot be overstated, experts say.

“This is the only plant in the world right now that serves the semiconductor industry in its entirety,” said TECHCET CEO Lita Shon-Roy, who has studied the quartz supply chain for more than two decades. “If something were to happen to these mines, it can put the entire industry on its ear, period. There’s no other capability.”

What happens next, experts say, is a two-part question. First, operators need to determine whether there has been any damage to the quartz mines themselves, or to the equipment the companies use to extract or refine the mineral.

If mining operations can start up again, the secondary question is how either company will transport refined quartz to export markets, given the state…