Will semiconductor production be derailed by Hurricane Helene?

The deadliest hurricane to hit the US mainland since Hurricane Katrina has also drawn attention to the potential disruptions to the technology industry. Hurricane Helene’s destruction threatens one of the industry’s most important supply chains: a North Carolina mining town that supplies high-purity quartz crucial to producing the chips found in smartphones and data centers worldwide.

The mining town of Spruce Pine is one of many U.S. communities affected by Hurricane Helene, which killed more than 200 people in multiple states, displaced thousands and left more than a million homes and businesses without power. The storm pushed 600 miles inland from the Florida coast, causing deadly flooding across a wide area, even deep into North Carolina’s Blue Ridge Mountains, where the Spruce Pine quartz mines are located.

Here’s what you need to know about how Helene’s ripple effects could impact the tech industry.

Why is high-purity quartz so important?

High-purity quartz is used to make quartz crucibles, cylindrical containers that are essential to the chip manufacturing process because they can tolerate the high temperatures required to melt silicon. The melting point temperature for semiconductor grade polysilicon is around 1425°C (2597°F), and quartz crucibles can typically withstand temperatures up to 1650°C (3000°F).

In the chip manufacturing process, the molten quartz crucibles are filled with molten silicon. A silicon seed crystal is dipped into the molten silicon in the rotating crucible, allowing it to grow into a significantly larger silicon rod before being gradually pulled out. A fully grown rod can weigh more than 500 kilograms.

These silicon blocks are then cut into silicon wafers, which can in turn be printed with the transistor patterns that form the basis of modern computer chips.

Where does high-purity quartz come from?

The natural quartz deposits in Spruce Pine formed when North America and Africa collided about 300 million years ago to form the supercontinent Pangea. That process created the Appalachians and also forced part of Earth’s oceanic crust to sink beneath North America, where intense heat and pressure near the planet’s mantle melted ocean sediment and rock.

The resulting lava cooled slowly over time, forming pegmatite rock deposits containing large mineral crystals, including high-purity quartz. These pegmatite formations eventually became more accessible at the surface due to increased geological unrest and weathering.

How did Hurricane Helene impact quartz mining operations?

The Spruce Pine mining district currently has quartz mining and refining operations owned by Belgium-based Sibelco and Norway-based The Quartz Corp. Both companies halted operations on September 26 and have not yet said when they will be able to restart.

The companies say they have confirmed the safety of their employees and contractors in the area – and described relatively minimal direct damage to their facilities.

“The initial assessment indicates that our operating facilities in the Spruce Pine region suffered only minor damage,” Sibelco said in an Oct. 3 statement. “Our dedicated teams are on site carrying out cleaning and repair activities to restart operations as quickly as possible.”

“We have been able to conduct initial visual inspections of our factories and it appears that the damage is mainly concentrated around the support units,” The Quartz Corp said in a statement on October 2. But the company also warned that the resumption of mining operations “will also depend on the reconstruction of local infrastructure” – many of the area’s roads were closed and damaged in the immediate aftermath of the storm.

Similarly, Sibelco cited power outages due to the storm as a challenge. “Restoring power remains critical to resuming our operations,” the company said in a statement. “Rehabilitation of the power lines to our power stations has progressed significantly.”

The Quartz Corp also described that it had stockpiles of quartz in Norway that could be used in ongoing purification processes, along with additional “safety stocks of finished products” that could prevent critical shortages for customers – including semiconductor manufacturers – in the short to medium term. .

Will Helene disrupt the supply of semiconductors?

Major semiconductor manufacturers have said they currently do not expect any disruptions to their operations in the aftermath of Hurricane Helene.

TSMC, a Taiwanese company that is the world’s largest chip manufacturer, described having “several global suppliers” to rely on. “Due to an effective risk management system and close partnerships with suppliers, we currently do not expect any significant impact on the company’s operations,” a TSMC spokesperson said. “We continue to monitor the situation closely.”

Samsung Electronics, the second largest chip manufacturer headquartered in South Korea, said New scientist that the company’s operations were not affected.

GlobalFoundries, the largest semiconductor manufacturer based in the US, described itself as having “the flexibility to deploy alternative sources for key supplies” with chipmaking facilities on three continents. “We are in contact with our global suppliers and do not anticipate any disruption to our quartz supply as a result of Hurricane Helene,” a GlobalFoundries spokesperson said.

Companies that produce raw silicon wafers currently have wafer inventories sufficient to last three to eight months, Dylan Patel of SemiAnalysis, an independent research firm, said in a social media post.

Are there alternative sources of quartz for the global semiconductor industry?

Spruce Pine “has an almost unique combination of purity, availability and price,” wrote Ed Conway, a journalist at Sky News and author of Material worldin a Substack message. But he also pointed to other high-purity quartz mines in China, Russia and Brazil.

Natural deposits of high-purity quartz are “scarce,” but companies can use purification methods or even synthetically produce pure quartz if necessary, Patel said. He also pointed to the company Ferroglobe, which acquired a high-purity quartz mine in South Carolina in October 2023. A company press release predicted that mining operations could begin in the second half of 2024.