How Hurricane Helene Could Disrupt Global Semiconductor Supply Chain, And Potentially Drive Inflation Higher

Hurricane Helene landed in the southeastern United States on Thursday, causing deadly floods and billions of dollars worth of damage. The storm, which hit North Carolina particularly hard, also has the potential to disrupt the $500 billion semiconductor industry, which could cause inflation to spike higher.

What Does Helene Have To Do With Semiconductors? Spruce Pine, a mining town in North Carolina, has some of the purest quartz on Earth, according to the Verge. The town’s quartz is essential for semiconductor manufacturers, as it's used to produce silicon wafers, a critical component for semiconductors and chips.

Footage shared to social media sites like X shows roads completely underwater in areas surrounding Spruce Pine, although the exact damage done to the town's mining operations is unclear. A spokesperson from The Quartz Corp, one of the town's mining companies, told the Verge that it's too early to comment on the storm's impact on the company's operations.

Read Also: Hurricane Helene Devastates Southeastern U.S., Slamming Infrastructure And Leaving Millions Powerless

So, this wouldn't be the first time a natural disaster has impacted Spruce Pine's mining operations. In 2008, a fire impeded the miner's ability to produce the town's high-purity quartz, sending "shivers" through the industry, according to Wired. But today, 16 years after the fire, semiconductors are much more pertinent to the global economy, with everything from cars to smartphones requiring advanced chips.

The Context: When the COVID-19 pandemic disrupted the global semiconductor supply chain, it impeded the production flow of goods like cars and appliances, sending prices higher as supply was constrained. And while the Federal Reserve and other central banks have made progress in their fights against inflation, supply chain issues like a hurricane disrupting semiconductor production could cause inflation to rise again. 

In addition to the town's mining companies, semiconductor manufacturing companies that are reliant on Spruce Pine's raw materials could be impacted by the flooding. These companies include Tawain Semiconductor Mfg TSM, ASML Holding ASML, Applied Materials AMAT, and more.

In addition to the disruptions potentially caused by Hurricane Helene, ongoing labor disputes with dockworkers could also impact the global supply chain and increase the prices of goods.

Keep Reading:

• Amazon, Apple, Tesla Brace For Supply Chain Disruptions As Potential East Coast Dockworkers Strike Nears

Image created using artificial intelligence via Midjourney.