Hurricane Helene causes disruption to critical AI chip supply chain in North Carolina

Hurricane Helene Causes Disruption to Critical AI Chip Supply Chain in North Carolina

In the aftermath of Hurricane Helene, extensive flooding has caused severe disruptions in western North Carolina, particularly impacting two critical high-purity quartz mines in Spruce Pine. These mines, owned by Sibelco and the Quartz Corp., are pivotal in the global supply chain for AI chips, as they are the sole producers of the essential mineral used in manufacturing silicon wafers.

Spruce Pine, a small town in North Carolina’s Mitchell County, stands as an unlikely yet significant hub in the technological landscape. The town’s mines provide the high-quality quartz necessary for producing advanced semiconductors, which are integral to AI technologies, smartphones, and solar panels. However, the onset of Hurricane Helene has jeopardised operations at these facilities.

In the past week, Spruce Pine has been deluged with more than two feet of rain, as reported by the Associated Press, leading to the suspension of operations at both mining sites since last week. The severe flooding has caused extensive damage to the surrounding infrastructure, with over 130 fatalities attributed to the storm and hundreds of roads near Spruce Pine closed due to severe damage.

The impact of the hurricane extends beyond the mines themselves, affecting the infrastructure surrounding these critical operations. Mitchell County authorities highlighted the extensive damage, noting destroyed county infrastructure, toppled trees, and pervasive power outages leaving the region without electrical service, cellular communication, or internet connectivity.

Quartz Corp. has communicated the uncertain duration of this shutdown, stating that a comprehensive damage assessment is underway. Initial inspections suggest the assets have been relatively preserved; however, a full restoration of operations hinges on the reconstruction of local infrastructure, including power, water supply, and road networks. A spokesperson expressed the company’s commitment to investing necessary resources to restore production levels.

Meanwhile, visual reports from media outlet Hunterbrook reveal severe flooding at Sibelco’s site entrance, further illustrating the challenges faced by these operations. Although Sibelco has not provided immediate comments, the visible damage underscores the difficulties in resuming mining activities in the area.

The global reliance on Spruce Pine’s high-purity quartz for semiconductor production has sparked widespread concern among industry experts. Ed Conway, a journalist and author, emphasised the critical role played by these mines in his book “Material World: The Six Raw Materials That Shape Modern Civilization.” He pointed out the near-monopoly held by Spruce Pine in quartz production due to its unparalleled purity, consistency, and quantity, warning that replicating such conditions could take years.

At present, the global semiconductor market, with its extensive dependency on North Carolina’s quartz, is closely monitoring developments as industry stakeholders await news on when operations might resume. The shutdown serves as a stark reminder of the intricacies in global supply chains and the potential vulnerabilities they face from natural disasters.

Source: Noah Wire Services