A town of 2,000 people, holding the "lifeline" of the global semiconductor industry chain

A small town in the United States is pinching the global chip lifeline?

A sudden natural disaster has exposed a little-known vulnerability in the semiconductor supply chain. Hurricane "Helen" in North Carolina, USA triggered floods, leading to the shutdown of the ultra-pure quartz mine in the Spruce Pine area.

Spruce Pine is a small town in North Carolina, USA. This town is famous for its abundant mineral resources, especially the ultra-pure quartz it produces, which is crucial for the global semiconductor industry.

Experts say that the region supplies 90% of the world's ultra-pure quartz, which is a key raw material for chip manufacturing. It is used to make crucibles for producing high-purity silicon used in semiconductors. These crucibles contain silicon ingots that are sliced into thin wafers for making transistors and circuits, thereby manufacturing chips, which form the foundation of the $600 billion semiconductor industry. The purity of the quartz used in these crucibles needs to reach 99.999% to prevent reactions with purer polycrystalline silicon at high temperatures.

An Oslo-headquartered company describes Spruce Pine as the " only mine on Earth with quartz purity sufficient to produce crucibles needed for manufacturing semiconductor ingots."

A long-term interruption in the supply of ultra-pure quartz in the region could affect downstream production of key components for electronic products such as smartphones, computers, and solar panels, impacting the global chip supply chain, especially at a time when there is a surge in demand for AI servers and tight supply of high-end chips.

Although there are other sources of high-purity quartz globally, Spruce Pine's quartz has unparalleled advantages in terms of purity, quantity, and accessibility. Vince Beiser mentioned in his book "The World in a Grain" that while there are some small producers in countries like Russia, Brazil, India, and China, the high concentration of this critical material supply in a town with a population of about 2,000 is "quite crazy," and currently there is no real alternative.

However, the good news is that the impact of Hurricane "Helen" on the region appears to be short-term for now. Sibelco, the largest quartz mine operator in Spruce Pine, stated earlier this week: "The hurricane caused widespread flooding, power outages, communication interruptions, and damage to critical infrastructure in the region. The company ceased operations before the storm hit on September 26." The company announced on Friday that it has made significant progress in resuming operations, with initial assessments showing only minor damage to the operational facilities in the Spruce Pine area, and detailed assessments are ongoing.

Another miner in Spruce Pine, The Quartz Corporation, also expressed confidence in avoiding supply interruptions, although it is still early to assess the time for production recovery.

Chip consulting firm SemiAnalysis estimates that silicon wafer manufacturers such as GlobalWafers, Siltronic, and Sumco provide chip manufacturers such as Intel, Samsung, and TSMC with 3 to 8 months of inventory. Analysts believe that existing inventory can buffer any short-term interruptions, and mining activities may restart before the inventory is depleted. However, Ed Conway, author of "Material World," believes that it may take more time for operations to return to previous levels This event highlights the vulnerability of our economic foundation in daily life, as few people pay attention to places like Spruce Pine until a major event occurs. With the continuous growth in global demand for semiconductor chips, ensuring the stability of the supply chain has become particularly important