Posted on 04/05/2024 6:11:10 AM PDT by Red Badger
Why it matters: Ultra-high-purity quartz is an essential component to semiconductor chips, and the only places in the world that can meet this need are two mines in a small North Carolina town. The mines' owner, Sibelco, is investing $700 million to expand capacity, but is that enough to keep up with AI-fueled chip demand?
Spruce Pine is a small town about two hours drive northwest of Charlotte, NC. You can get to the general area via a number of ways, depending on your point of origin, but for the last stretch of the trip, you need to travel down Fish Hatchery Rd. It's a two-lane rural highway, as depicted in Google Maps, set amid a pleasant scenic backdrop.
It's on this road that the modern economy rests, according to Wharton associate professor Ethan Mollick, who teaches innovation and entrepreneurship and also examines the effects of artificial intelligence on work and education. That's because the road runs to the two mines that are the sole supplier of the quartz required to make the crucibles needed to refine silicon wafers.
This is not the first time these mines – owned by Sibelco, which mines, processes, and sells specialty industrial minerals – have been highlighted as integral not only to the global semiconductor industry but also to the solar photovoltaic markets.
Ed Conway raised the issue in his book, Material World, published last summer. Even before that, various media have covered the obscure mines. Mollick raised it again in a recent Tweet, emphasizing its strategic importance. If the mines were somehow to stop operating, "it would likely [be] a few years of major disruption while techniques to generate alternatives were scaled up. But the disruption would be pretty catastrophic."
It is an alarming prospect to contemplate, and it is fair to wonder whether Mollick is indulging in a bit of hyperbole. But there is no denying the fact that digital devices around the world contain a small piece of Spruce Pine's unique ultra-high-purity quartz. "It does boggle the mind a bit to consider that inside nearly every cell phone and computer chip you'll find quartz from Spruce Pine," Rolf Pippert, mine manager at Quartz Corp, a leading supplier of high-quality quartz, tells the BBC.
How did this unassuming North Carolina town gain such an outsized role in the global semiconductor supply chain? The answer is its unique mineral deposits, which formed 380 million years ago during the collision of Africa and North America. The intense heat and lack of water during their formation created quartz rock of unparalleled purity. These rocks are extracted from the ground and turned into quartz gravel, which is then processed into a fine sand. The silicon is separated from other minerals and then goes through a final milling. The final product is a powder that is shipped to refineries.
The inexorable march of artificial intelligence will continue to drive demand for chips and the materials in its supply chain. One question to ponder is whether Spruce Pine can keep up.
Sibelco, of course, has noted these trends as well and last year announced a $200 million investment to double high purity quartz capacity at its Spruce Pine facility, citing demand for the product, which is sold under the brand name IOTA. It will invest a further $500 million between 2024 and 2027.
This is also the source of the sugar white sands on our beaches, from millions of years of erosion of the Appalachians.......................
Ping!.................
Maybe that’s a good thing. AI is not our friend.
Quartz is the most common mineral on the planet. I am sure you can find an equivalent source elsewhere.
I believe this is also where Augusta National gets “sand” for the bunkers there. The ultra white color looks better on TV.
IMHO the AI thing is overhyped. I'm not saying it has no use or is going away. I'm saying the investing in it is overvalued and will soon come back to earth to AI's intrinsic value. Then the demand for quartz will go back to normal. At least, that's my humble opinion.
How long before some Chinese company buys it???
10% to the Big Guy type deal??
Home of the former Beams Chinese Restaurant.
Everybody doesn’t have the beautiful beaches you do bro......I can vouch for that. 😏
There are other prominent regions where high-purity quartz deposits have been discovered. Among them are Drag, Norway and certain parts of China.
10% to the Big Guy type deal??
Exactly. As long as Joe gets his cut, America is for sale!
I think the whole facility should be sold to the Chinese as long as 10% goes to the big guy.
If anything, investors don't understand what AI is and how profoundly it's going to change things.
“Quartz is the most common mineral on the planet. I am sure you can find an equivalent source elsewhere.”
Quartz is common, the high purity quartz required is not.
Quartz Hill California. Grew up nearby, quartz was all over the place. Now it’s been developed for the most part, would be interesting to see if what little hasn’t been covered by homes has recoverable quartz.
Unstated was the fact that there other local prospects if those being mined are panned out
“IMHO the AI thing is overhyped.”
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I’m not yet seeing the “killer app” to drive this technology. Maybe there is, but it all seems a bit overhyped with people talking their book. JMHO
I spent 4 years (March through October, 2004-07) hauling various colors of sand, by bulk dump trailer load, out of the sand filled Mississippi river floodplain near Muscatine, IA to golf courses as far as 200 miles away.
But those sand pits had no white sand. And only a few courses wanted it, because every little thing that wasn’t white stood out. If a golfer clubbed some nearby divot into a white sand bunker, the groundskeeper had a harder job making it look ‘pure’ again (golf is truly the vainest of sports, imo).
To please customer courses that wanted white sand, we would get that from silica mines along the Illinois river, about 30 miles west of Joliet.
“And only a few courses wanted it, because every little thing that wasn’t white stood out. If a golfer clubbed some nearby divot into a white sand bunker, the groundskeeper had a harder job making it look ‘pure’ again “
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No doubt. It is also my understanding that, for the Masters Tournament, they literally have hundreds of volunteers to do just that kind of thing.
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