Hurricane Helene has devastated North Carolina, leaving more than 200 people dead and a tragic trail of destruction in its wake. The natural disaster may have long-reaching implications for an important automotive sector, namely semiconductor chip production, reports CNN.
North Carolina is home to a small town near Spruce Pine, where you’ll find mines that boast the world’s purest quartz. This is an important element that is used in the production of semiconductor chips, a small but very significant component that powers modern, electronic-heavy cars – and just about every gadget you can think of. And it’s not only tech-laden vehicles like the BMW i7 that rely on these chips; even mainstream cars like the Toyota Corolla can’t function without these components.
No Word Yet On When Mining Activities Will Resume
While far less important than the death and destruction caused by Hurricane Helene, operations at the mine have come to a stop. Speaking to CNN, the companies that operate the respective mines – Sibelco and The Quartz Corp – said operations were suspended on September 26. There’s no word yet on when mining activities will resume, but both firms are looking to get back. However, there’s no way of knowing how much damage the hurricane has caused, and how long it will take to get things back to normal.
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Supply chain analysts claim it could take weeks for the mines to return to action, which could lead to chip shortages and price hikes. This isn’t good news for any industry reliant on these small components and could lead to automotive production delays, limited supply, and higher vehicle prices. Seaver Wang, co-director of the climate and energy program at The Breakthrough Institute, said these two mines are “critically important” to the semiconductor chip industry.
“We know nothing right now about damage for (the mining companies) right now, but the damage in Spruce Pine is so devastating that I’m not sure when they will have employees able to return. People are hurting, properties are destroyed, there are places where the roads no longer exist … My fiancée is a third-grade teacher, and her principal got a hold of her yesterday and said basically ‘the school is gone.'”
– Spencer Bost, Executive Director, Downtown Spruce Pine
Another Semiconductor Chip Crisis Could Cause Chaos
There’s no need to panic just yet, with chip manufacturers expected to have several weeks’ worth of supply. But further delays could risk chip shortages. Many may be wondering why semiconductor chip companies can’t source quartz from other mines. However, the facilities in Spruce Pine yield ultra-high-purity quartz that make up as much as 90% of the world’s high-purity quartz. In the meantime, regular quartz could be purified and used, but it still won’t make up for the loss from the Spruce Pine mines.
Let’s not forget the catastrophic ramifications of the COVID-19-induced semiconductor chip crisis. Automakers were building cars without the all-important chips, which meant these vehicles could not be delivered to customers. Some automakers decided to ship vehicles with missing features. This led to dwindling supply, increased demand for new (and used) vehicles, and exorbitant markups.
“This mine is considered a national strategic asset, and I would imagine that the federal government is going to move hell and high water to get it up and running as fast as possible … everyone knows this mining complex is important.”
Seaver Wang, co-director of the climate and energy program at The Breakthrough Institute
Source:
CNN
