Semiconductor panic at North Carolina quartz mine highlights America's fragile supply chain



The ramifications of the federal government's failures in disaster relief showcase a much larger issue than it appears on the surface. A natural disaster could wipe out key resources or, at best, reroute supply lines to sources that could significantly inflate prices for Americans.

Spruce Pine, North Carolina, has been the source of economic panic since it was revealed that a Sibelco North America Inc. facility where ultra-high-purity quartz is mined is in the flood zone of Hurricane Helene.

Quartz is used in semiconductors and to refine wafers, which are used in microchips. Semiconductors themselves are used in nearly all consumer electronics, such as computers, phones, and appliances.

Reports and X threads have popped up sounding the alarm that entire industries could grind to a halt as a result of closures at the North Carolina plant.

An alleged geologist wrote that he is "concerned about the potential future global economic disaster because Spruce Pine is the sole producer of ultra pure Quartz for crucibles that all global semiconductor production relies on."

"All semiconductor production may grind to a halt in six months. The entire world's economy depends on Spruce Pine," he added.

This scare was the driving narrative until contradicting threads were written, revealing that there are other sources of purification as well as other mines and stockpiles. In fact, there is reportedly another mine in South Carolina.

A high-purity quartz mine was acquired by Ferroglobe in 2023.

As X account SemiAnalysis pointed out, the existing inventories and alternative methods can provide a "buffer" if the industry takes a hit due to the recent hurricane.

In conclusion – existing wafer inventory provides a buffer as mining operations restart, major companies are already using synthetic methods to produce semiconductor-grade quartz crucibles, and there are other sources of HPQ. Spruce Pine FUD is exaggerated.
8/8
— SemiAnalysis (@SemiAnalysis_) September 30, 2024

This does not mean the industry is in tip-top shape should a disaster like this happen. What it does reveal, however, is that if U.S. strategic infrastructure is not shored up, the consumer will take the hit in the marketplace.

This was glaringly obvious during COVID, when it became apparent that the U.S. was overly reliant on drug manufacturing from China. In fact, this was also an issue during the Trump administration in 2019.

Trump's chief economic adviser, Gary Cohn, wrote at the time that 97% of all antibiotics in the United States came from China.

"If you're the Chinese and you want to really just destroy us, just stop sending us antibiotics," he said, per the Council on Foreign Relations.

For semiconductors, China has the second-highest share of sales in the world. When supply chains in the United States are disrupted, at best, the market turns to the Chinese. If that option is not available, competitors in Europe may be able to pick up the slack, but at nowhere near as low a price.

Nothing is scarier than the situation surrounding microchips from Taiwan; the smaller the chip, the more likely it came from the region. According to Forbes, Taiwan is responsible for 92% of the production of logic semiconductors when components are smaller than 10 nanometers.

As production has shifted overseas since the 1980s — when semiconductor power was within the U.S. and Europe — weak and overly-reliant supply chains could be one disaster or political move from collapse or, at best, an unaffordable state.

Like Blaze News? Bypass the censors, sign up for our newsletters, and get stories like this direct to your inbox. Sign up here!

Biden’s Tariffs Are Bad. Biden’s Tariffs Coupled With EV Mandates Are Even Worse

Biden's tariffs play on the good intentions of voters, but all they do is raise costs for consumers and businesses and undermine innovation.

Top U.S. Investors Aid CCP Abuses By Dumping Billions Of Dollars Into Chinese Tech

It’s time U.S. lawmakers force venture capital firms to stop fueling the growth of China's authoritarianism and military abilities.

China’s Growing Nuclear Arsenal Is A Bigger Threat Than A Spy Balloon, And The U.S. Helped Make It Possible

Hopefully, the Chinese spy balloon incident will become a turning point, a wake-up call for a divided nation.

Biden Admin To Distribute $50 Billion Chips Fund Based On Race And Gender

'Inclusive and broadly shared opportunities for business'

Arizona Governor Doug Ducey visits Taiwan to secure a semiconductor manufacturing plant in the state



Arizona Governor Doug Ducey traveled to Taiwan on Tuesday to meet with Taiwan President Tsai Ing-wen to discuss a multibillion-dollar semiconductor manufacturing deal.

Arizona is set to build a $12 billion Phoenix plant for Taiwan Semiconductor Manufacturing Corp., reported the Associated Press. TSMC announced last year that it would be investing $3.5 billion in the new U.S. factory.

Intel Corp. announced in March 2021 that it would fund two additional Arizona semiconductor factories. The company has been manufacturing in the state since 1980 and plans to invest another $20 billion in the additional facilities.

Governor Ducey and Arizona's Chamber of Commerce president and head of economic development were the latest U.S. officials to visit Taiwan, despite repeated warnings from China. Indiana Governor Eric Holcomb traveled to the self-governing island last week to strengthen foreign relations and discuss the processor chip industry.

Semiconductors are crucial for nearly all electronics, such as smartphones, computers, high-tech weapons systems, medical devices, and vehicles. In December 2021, Reuters reported that TSMC produced more than 90% of the world's processor chips.

The semiconductor industry was invented in Silicon Valley, but Taiwan now dominates the market. According to Fast Company, Intel produced nearly 40% of the world's output of processor chips in the 1990s.

U.S. officials are now prioritizing semiconductor manufacturing in the country. In July, Congress passed a law offering more than $52 billion in grants and other aid to the processor chip industry. The CHIPS Act would also provide a 25% tax credit to those who invest in U.S. factories.

State officials nationwide are vying for semiconductor factories in their communities to boost local economies and strengthen the country's technology independence.

In addition to the two factories breaking ground in Arizona, Intel also announced a $20 billion investment in an Ohio chip factory.

Samsung Electronics revealed that it would build a new $17 billion facility in Austin, Texas.

In response to House Speaker Nancy Pelosi's previous visit to Taiwan in August, China began running live-fire military drills off the island's coast. On Tuesday, President Tsai Ing-wen told troops to remain calm despite the ongoing threats, ABC News reported. The president stated, "The more provocative enemy soldiers are, the more stable we need to be. We will not allow those on the opposing banks to manufacture a conflict with an inappropriate excuse."