7

Oct

Hurricane Helene Disrupts Semiconductor Supply Chains

Hurricane Helene has severely disrupted semiconductor supply chains, particularly
impacting Spruce Pine, North Carolina, which supplies approximately 70% of the world’s
high-purity quartz (HPQ)—a critical material in semiconductor manufacturing.

Impact on Mining Operations

Mining operations in Spruce Pine, where key HPQ producers like Quartz Corp and Unimin
operate, have been temporarily halted. The companies are assessing damage to their
facilities and local infrastructure. The destruction extends beyond flooding, severely
affecting transportation networks and power systems necessary for HPQ extraction and
distribution. This has caused serious concern for industries reliant on semiconductor
production.

Concerns Over Supply Chain Delays

With no set timeline for resuming HPQ production, there are growing fears about delays in
semiconductor manufacturing. Manufacturers typically keep some reserves of HPQ, but
these stockpiles are limited. If disruptions persist, the semiconductor industry, valued at
around $500 billion globally, could experience production delays and increased costs. The
longer the supply chain remains affected, the more significant the ripple effects across
industries like electronics, automotive, and communications.

Risks of Lower-Quality Materials

If HPQ remains unavailable for an extended period, manufacturers may be forced to use
lower-quality materials like silicon metal, which lack the purity needed for advanced
semiconductor applications. This could impact the performance of critical components
used in sectors such as healthcare, military, and quantum computing. Industries relying on
cutting-edge chips could face production delays and compromised quality.

Economic and Industry Impacts

Restoring infrastructure and supply chains could take weeks, further delaying HPQ
production. A prolonged shutdown may drive up semiconductor costs, leading to price
increases in electronics, electric vehicles, and other chip-reliant products. These
disruptions would exacerbate existing supply chain challenges across industries.

Hurricane Helene has exposed a key weakness in the semiconductor supply chain:
reliance on single-source critical materials like high-purity quartz (HPQ). Natural disasters
like this can disrupt operations, and with extreme weather events becoming more frequent
due to climate change, the risks are increasing. Many companies are now considering
ways to reduce these vulnerabilities, such as diversifying their material sources and
investing in more resilient infrastructure to help protect against future disruptions.

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