The US – specifically the state of North Carolina – may possess the ultimate secret weapon in the new trade war with China that’s currently raging at unprecedented levels.  While everyone looks to Taiwan as the center of modern computer chip manufacturing, a very little-known fact is that, if it weren’t for the town of Spruce Pine, North Carolina, none of that multi-trillion-dollar industry would be possible.

That’s very powerful when it comes to the cards in the hands of the US and North Carolina in the current trade wars. In the new high-stakes trade war, the sleepy little mountain town of Spruce Pine – with a population of 2,194 people – could be America’s proverbial ace in the hole.

In fact, it could mean that the US is holding all the cards, not just the ace in the hole.

High-purity quartz (known by industry insiders by the acronym “HPQ”) is an exceptionally pure form of quartz that contains extremely low levels of impurities such as aluminum, potassium and iron.

Quartz is an abundant mineral around the world; however, billions of years ago, random geological activity in Western North Carolina (though the area wasn’t known as part of North Carolina yet) came together in an absolutely perfect way to form this incredibly special type of quartz that is immensely valued for its unique physical and chemical properties.  Those properties make it indispensable in advanced industrial applications including computer chip production.

High-purity quartz is used in many high-tech items such as solar panels and high-intensity lighting – but it is absolutely crucial when it comes to the production of silicon wafers in all modern microchips. High-purity quartz is needed for the creation of ultra-refined polysilicon wafers – a core element in both the solar and semiconductor sectors.

And the Spruce Pine Mining District in North Carolina supplies between 80 to 90 percent of all of the high-purity quartz in the world.

There are a few secondary sources for minor amounts of the mineral, such as Norway or Brazil; however, Spruce Pine’s high-purity quartz is considered to be the absolute gold standard when it comes to this mineral because the quartz there naturally contains incredibly low levels of impurities.

It is 99.9999999 pure.

The Spruce Pine Mining District, which is about 50 miles northeast of Asheville, is home to very unique “granitic pegmatite rocks” that are devoid of the contaminants found everywhere else in the world – due to those highly unusual geological conditions under which they were formed.

The supply chain for this material was already under stress before the trade war with China began – because Hurricane Helene hit the western part of the state late last year.

There are two companies that manufacture high-purity quartz from the mining districts in western North Carolina, and one of them was hit very hard by the hurricane.  That producer was offline for months while global demand continued to increase due to AI initiatives and other high-tech items dependent on the product.

That company, Sibelco, has since restarted its mining and processing operations in Spruce Pine.

Production and shipments are now ramping up to full capacity, but the powerful storm has already created a gap in the supply chain of the essential mineral that everyone wants to get their hands on.

Due to the difficulty of finding and processing HPQ, and its importance in high-tech industries, it’s considered a “strategic resource” by many countries.

In the heat of the trade war this week, China announced discoveries of high-purity quartz deposits. On Thursday, April 10, China’s Ministry of Natural Resources made the claim.

China’s efforts to become self-sufficient in strategic materials – and especially to get rid of its dependency on the US in that regard– has, in recent years, jump-started a mass effort to gain alternative access to strategic minerals that come only or largely from America.

Currently, the global supply predominantly comes from two mines in Spruce Pine.

In a case of very interesting timing, just as the trade war between the US and China ramped up, China’s state propaganda-oriented Xinhua News Service announced that China had discovered its own deposits of high-purity quartz.

The timing of the announcement – in the middle of the escalating trade war –makes one wonder if the announcement is misinformation to downplay the importance of the small North Carolina mountain town and the mining district that holds all the cards.

The propaganda news outlet claimed on Wednesday that the China deposits were found in the Henan and Xinjiang provinces of China; however, no details of the deposits’ size have been disclosed, and, even if true, it isn’t clear how the purity levels compare with the gold standard in Spruce Pine.

Regardless, the semiconductor gold in them thar Carolina hills could be a giant bargaining chip when US officials finally sit across the table with Chinese leaders to hash out a new trade deal.

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