Damage to Hailun quartz mine threatens semiconductor chip industry | Wilnesh News

Virtually all of the world’s supply of minerals critical to semiconductor production comes from a small town in the foothills of the Blue Ridge Mountains that has been Hurricane Helen.

Spruce Pine, North Carolina, has no running water or electricity, more than a week after Helene struck the town of 2,200 people. Roads and railways into and out of the area severely damagedaccording to local officials.

Spruce Pine’s mines produce the purest quartz in the world and play a central role in wafer manufacturing.

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

The natural disaster in Spruce Pine also highlights the continued instability of global supply chains, more than four years after Covid-19 reminded Americans of their dependence on imported goods.

Two companies, Sibelco and The Quartz Corp., extract high-purity quartz from spruce pine, refine it and then export it to manufacturing facilities primarily in China and other parts of Asia.

Most of the refined, high-purity quartz is then used to create a container called a crucible, which holds the silicon as it melts and is converted into wafers used to make semiconductors.

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

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

The companies said they currently have no timetable for when normal operations will resume.

“The Spruce Pine community has been particularly hard hit. To address these challenges, we have temporarily ceased operations at the Spruce Pine facility,” Sibelco said in a statement on September 30.

Quartz Corp. said in an Oct. 1 statement that it had “no idea” when it would be able to resume operations.

Experts say the challenges that any prolonged disruption at the Spruce Pine mine would pose for the semiconductor industry cannot be overstated.

“This is currently the only factory in the world that fully serves the semiconductor industry,” said Lita Shon-Roy, CEO of TECHCET, who has studied the quartz supply chain for more than 20 years. “If something happens to these mines, the entire industry is affected, period. There’s no other capacity.”

What happens next is a two-part question, experts say. First, the operator needs to determine whether there was any damage to the quartz mine itself or to the company’s equipment used to extract or refine the mineral.

If mining operations can restart, a second question is how the two companies will move refined quartz to export markets, given the state of some of the infrastructure in western North Carolina.

TECHCET estimates it could take four to six weeks before the companies’ operations are running at full speed again. But Roy said the forecast depends on road recovery, as the two companies rely mainly on trucking to transport minerals.

However, early indications are that transport infrastructure needs extensive rebuilding.

“The roads are gone,” said Spencer Bost, executive director of Downtown Spruce Pine, a nonprofit that works with the city. In some areas, he said, “the roads don’t exist anymore.”

When it comes to electricity, Bost said, “It’s not that the wires are down, it’s that the poles are gone.”

However, there are still two strands of hope for the semiconductor industry.

First, there may be some stock of high-purity quartz used in the components it helps manufacture. Shon-Roy said this could give the industry a two- to three-month buffer while Spruce Pine recovers from the impact of Helene.

Shon-Roy said demand has been quite weak as the semiconductor industry emerges from its own downturn. In addition, most companies have been maintaining larger inventories since the outbreak.

“This will help alleviate delays in restarting these plants,” Sean Roy said.

Another bonus: Crucibles made from quartz have a shelf life of about 300 to 400 hours, or about two weeks, before needing to be replaced, said Dustin Mulvaney, a professor of environmental studies at San Jose State University. .

So there could be some lag before chipmakers suffer more losses.

“But once they start having to replace crucibles, it could lead to chaos,” Mulvaney said.

The longer it takes for mining operations to resume at Spruce Pine, the greater the impact will be.

“A month’s delay is not bad,” Chanroy said. “Two months became difficult. Three months became a real problem.”