North Carolina's Silicon Mines: Leverage for the US?

Key points

• 0:00

  Quartz is used for two things. Number one, it is a source of the silicon dioxide that eventually goes into the crystals that are grown in a vat to the size of cars to be sliced into the wafers that are the core of every semiconductor.

• 0:00

  But what this mine is really good for is the ultra-ultra-ultra-pure silicon dioxide, which you use not for the semiconductors themselves, but you use to make crucibles that are used to melt and purify other silicon dioxide.

• 1:06

  And the U.S. is a world provider of both. So yes, the U.S. could absolutely use this as leverage.

• 1:06

  You see, one of the things that people forget is that there are so many pieces of the semiconductor supply chain, 30,000 independent inputs, 100,000 supply chain steps, and no country controls a majority of any of them.

• 1:06

  And yes, the Chinese dominate the processing all of those materials, but only up to the point because the Chinese tech base is, well, it's still a developing country by most measures.

• 1:06

  So what happens typically is, say, copper, the raw copper ore comes from Chile. It's partially processed in something called red copper... Then it gets sent to China, where they cook off the rest and purify it as much as they can.

• 1:06

  So the copper then comes to another country, typically the United States or Germany or Japan or Korea, where it's turned into something called 8N copper or 9N, 10N, 11N.

• 2:53

  So all of these materials round trip multiple times. From the country where the ore comes to China to do the primary processing, somewhere else to the finished processing, and then the Chinese re-import the ultra-purified components that are the basis of their semiconductor industry.

• 2:53

  So yes, silicon dioxide out of North Carolina is a major geopolitical pressure point. It is something that gives a lot of leverage, but it implies it's the only thing. And there are dozens of points on just the material side of the equation where the United States or its allies have a de facto monopoly, and the Chinese have nothing.

• 2:53

  The most advanced one, of course, are the etching machines themselves... But ASML itself has over several thousand suppliers around the world, the single largest component of which are in the United States.

• 2:53

  Anyone who tells you that the Chinese can overtake us in this industry is ridiculous. But also, anyone who tells you that we could do it ourselves is ridiculous.

• 2:53

  This is the most sophisticated supply chain system that humanity has ever created.

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