Semiconductor industry hit hard by recent tropical storms

Semiconductors are a massive piece of the puzzle of different types of electronics and vehicles in the automotive industry. The automotive industry is becoming more software and electronic-based, making semiconductors extremely important. North Carolina was hit heavily by Hurricane Helene, causing landslides, historic flooding, and damage throughout the state. A small town named Spruce Pine has mines that produce the world’s purest quartz, a key component in producing global semiconductors. The Spruce Pine mine is the most crucial for the semiconductor manufacturing industry, the solar panel industry, and all the industries that use these components in their products.  

The mines were shut down a few days before the hurricane hit, resulting in minor damage. However, the rest of the town has been torn apart; roads, schools, trees, power lines, and much more have been completely destroyed. Even though the mine was not horribly damaged, the community and the mine’s workers’ lives have been completely changed. The largest employer for the Spruce Pine mine is a Belgian company called Sibelco. Sibelco has been collaborating with governments and third-party resources to get the people in North Carolina the resources they need. There is a second company named Sibelco, which owns parts of the Spruce Pine mines. The company is owned jointly by a French and Norwegian mineral company.  The mine is in the U.S. but is owned by three separate companies worldwide, allowing quartz to be distributed to these countries and others surrounding them.  

Spruce Pine’s mine is estimated to provide around 80% to 90% of the world’s high-purity quartz. Around 70% of the quartz mined from Spruce Pine is used in computing applications. With no telling when the mine will be fully operational again, there can be an expected semiconductor (chip) shortage across the global supply chain. This will increase the cost of current chips and those produced from here on out.   

Reopening the mines is not the most challenging part of getting the quartz to customers. Once the mines reopen, the town will still have lasting damage from the hurricane, such as damaged roads, railroads, and airports, making it hard to transport the quartz out of North Carolina. Once the quartz is extracted, they ship it to manufacturing sites in China and Asia. The last product stocked was not damaged or impacted by the hurricane. Quartz Corp has said that the current shipment will make its way to customers as soon as they can.  

After COVID-19, companies worldwide that used semiconductors, or the materials needed to make them, started to have extra safety stock on each order. The semiconductor companies have enough safety stock to last them around two months. A delay from the mines for a month or two is not ideal, but the semiconductor companies can manage. However, if there is a three-month or greater delay, it will turn the semiconductor industry and all the markets that use them upside down.  

Currently, Quartz Corp and Sibelco are not turning all their efforts to make the mines operational again. Instead, they are trying to help heal the community around them and their employees’ families. The rising climate in the past decade has caused a town like Spruce Pine to become a victim of a hurricane when it would not typically be. Quartz Corp and Sibelco want their mines to run as soon as possible. However, the community and its people need to be healed before Quartz Corp and Sibelco can shift their efforts toward becoming operational again.