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One western North Carolina town reeling from Tropical Storm Helene could impact the massive global semiconductor industry.

Why it matters: Spruce Pine is one of the only places in the world to mine high-purity quartz. The mineral is an essential ingredient of chips in countless products, including medical devices, solar panels, cellphones and the chips powering the latest tech craze: artificial intelligence.

Context: It's difficult to underscore the significance of Spruce Pine — a town of about 2,000 people, known for its charming downtown and blossoming arts scene — to the global economy. Economics editor Ed Conway put it best in his 2023 book "Material World," writing:

"It is rare, unheard of almost, for a single site to control the global supply of a crucial material. Yet if you want to get high-purity quartz — the kind you need to make those crucibles without which you can't make silicon wafers — it has to come from Spruce Pine."

The Quartz Corp and Sibelco both export high-purity quartz from Spruce Pine. While there are other places to find the material, such as Russia and Brazil, this mountain town has the highest quantity of the highest purity, says Conway.

Threat level: A few weeks of shutdown is not the end of the world, Conway tells Axios. However, longer than that could put the industry into "another crisis." The semiconductor industry would need to find alternatives.

Flashback: The pandemic sparked a stressful global chip shortage. Demand for computers boomed, making it difficult to keep products — like iPads and game consoles — on shelves, and car dealership lots stocked.

But long-term mine closures or export delays in Spruce Pine would be a supply problem, a much graver issue for the economy to stomach.

The big picture: The Southeast will feel the impacts of Helene for decades. It will take years to rebuild towns, including downtown Spruce Pine. Across six states, the rising death toll has surpassed 130.

The mines in Spruce Pine are still accounting for their workers and families, the international companies stated.

The level of destruction at the sites is unknown. However, even if the facilities are intact, the railroads that move the quartz will likely need drastic repairs.

The Quartz Corp and Sibelco temporarily halted operations on Sept. 26. Neither has said when they may restart.

"This is second order of priority," The Quartz Corp said in a statement. "Our top priority remains the health and safety of our employees and their families."

Zoom out: Demand for Spruce Pine's quartz has exploded over the past several decades. Sibelco is investing an estimated $700 million to expand production at the site, which increased 60% between 2019 and 2023, the News & Observer reported.

"'The AI spike' — is what I've been hearing people call it," says Spencer Bost, executive director of Downtown Spruce Pine, an economic development organization.

Between the lines: The quartz mining industry is highly secretive, which may prevent an understanding of the extent of the problem for a while.

Conway wrote in his book that outside contractors are taken into the Sibelco factory blindfolded to the machine they need to fix.

State lawmakers discussed banning adversary countries from taking ownership of quartz mines or land last year, according to Business North Carolina.

How Spruce Pine's only grocery store looked after Helene. Photo: Courtesy of Spencer Bost

Helene took out an N.C. town the entire tech world relies on

Helene damage in Spruce Pine could induce a global chip shortage that threatens the economy.

Overhead view of Spruce Pine, North Carolina. Photo courtesy of The Quartz Company

Axios Local

One <a class="gtmContentClick" data-vars-link-text="western North Carolina" data-vars-click-url="https://www.axios.com/local/charlotte/2024/09/29/helene-flooding-north-carolina-donations-help" data-vars-content-id="0db3ab05-44af-4717-a4b7-a30c8076a616" data-vars-headline="Helene took out an N.C. town the entire tech world relies on" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/charlotte/2024/09/29/helene-flooding-north-carolina-donations-help" target="_self">western North Carolina</a> town reeling from Tropical Storm Helene could impact the massive global semiconductor industry.Why it matters: Spruce Pine is one of the only places in the world to mine high-purity quartz. The mineral is an essential ingredient of chips in countless products, including medical devices, solar panels, cellphones and the chips powering the latest tech craze: <a class="gtmContentClick" data-vars-link-text="artificial intelligence." data-vars-click-url="https://www.axios.com/2024/10/01/cerebras-ai-chipmaker-nvidia-ipo" data-vars-content-id="0db3ab05-44af-4717-a4b7-a30c8076a616" data-vars-headline="Helene took out an N.C. town the entire tech world relies on" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2024/10/01/cerebras-ai-chipmaker-nvidia-ipo" target="_self">artificial intelligence.</a>

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