A small mining town in Western North Carolina, Spruce Pine, has been severely affected by Hurricane Helene. This could significantly impact the large-scale technology industry reliant on its supply chain. Spruce Pine, located about an hour's drive from Asheville, is known for producing high-purity quartz used in semiconductor manufacturing. It is the only place in the world where this unique, high-quality mineral can be sourced in large quantities at such a low cost.
Two companies operating mines in the town have shut down local facilities due to widespread flooding, power outages, and communication disruptions following the storm. Belgium-based mining company Sibelco stated that the hurricane had caused significant flooding, power outages, communication disruptions, and damage to critical infrastructure in the Appalachian region. The company emphasized that the safety of employees and their families, who are facing severe disruptions and displacement, remains a top priority.
The Quartz Corp., a major supplier in the region headquartered in Norway, said it is facing multiple challenges related to flooding and downed power lines. Both Sibelco and Quartz halted their local operations on September 26 to respond to the adverse weather conditions. Quartz indicated that it is uncertain when operations will resume.
Sources suggest that repair work on the plants and the town might cause supply chain bottlenecks, leading to temporary increases in the prices of chips and electronic products. This is particularly concerning as the materials from Spruce Pine are hard to source globally. Peter Hanbury, a partner at Bain & Co. and a semiconductor manufacturing expert, noted that it is not uncommon for key raw materials in semiconductor manufacturing to come from a single geographical location. However, Spruce Pine is particularly significant, accounting for 80% to 90% of the global supply of ultra-pure quartz, with few viable alternatives.
Ultra-pure quartz is critical in semiconductor production, which serves as the brain for microchips used in devices like smartphones, computers, gaming consoles, cars, and medical equipment.
