Sponsored by Sterling Metals

The semiconductor problem that is Spruce Pine

In the mountains of North Carolina, the town of Spruce Pine plays an outsized role in one of the most critical sectors of the global economy: semiconductor manufacturing. The ultra-pure quartz found in the town’s mines is indispensable to the production of silicon wafers, a key component in virtually all electronic devices.

This means that the silicon chips found in smartphones, computers, solar panels, and countless other technologies all trace a part of their origins back to this rural town.

Recently, however, Hurricane Helene disrupted access to Spruce Pine, prompting concerns about the far-reaching implications for global chip manufacturing. A disruption to this supply chain, some experts warn, could have massive economic consequences, given the lack of alternative sources for the high-purity quartz required in the semiconductor industry.

You can read more on the matter here.

What’s going on?

• NDP Surpasses Liberals for Second Place Outside Quebec, Conservatives Maintain Strong Lead (theDeepDive)

• Canada September factory PMI shows first growth in 17 months (Reuters)

• Spruce Pine: How a Small Appalachian Town Blocked By Hurricane Could Power the Modern Tech World (theDeepDive)

• Minimum wage in Ontario, Manitoba, Saskatchewan, P.E.I. increases (BNN)

• Canadian Film Programs at Risk as Netflix Cuts Sponsorship Amid New Law (theDeepDive)

• Chinese-made EVs are now subject to a 100% tariff. What does this mean for Canadians? (CBC)

• Florida Rep Wants Entire Country To Socialize Insurance Costs In State (theDeepDive)

• SpaceX launches rescue mission for 2 NASA astronauts who are stuck in space until next year (NP)

• Palisades Nuclear Plant Secures $1.5 Billion Loan for Restart (theDeepDive)

• Google to invest $1 billion in Thailand to build a data center and accelerate AI growth (CNBC)

• Argentina’s Poverty Rate Hits 53% Under Milei’s Austerity Measures (theDeepDive)

• An Israeli air strike hits central Beirut for the first time in nearly a year of conflict (Globe)

• 45,000 Port Workers Set to Strike On Tuesday, Biden Says He Won’t Intervene (theDeepDive)

• German inflation drops below 2% for first time since early 2021 (FT)

What’s the latest?

• Geopolitics: A senior U.S. official has indicated that Iran is preparing to imminently launch a ballistic missile attack against Israel. The U.S. is actively supporting Israel in preparing its defenses, warning that such an attack would carry "severe consequences" for Iran. While an Israeli military spokesman stated that no aerial threat from Iran has been identified yet, Israel's defense systems are fully prepared.

• Major Strike: Dockworkers on the U.S. East and Gulf Coasts have launched their first large-scale strike in nearly 50 years, halting ocean shipping across 36 ports. The strike, sparked by a breakdown in labor contract negotiations between the International Longshoremen's Association and the U.S. Maritime Alliance, could cost the economy billions of dollars a day and potentially increase inflation. The ILA demands a 61.5% wage increase and protections against port automation, rejecting USMX's offer of a nearly 50% wage hike.

• Economy: US job openings rose to 8.04 million in August, the highest in three months, despite other indicators pointing to slowing labor demand. The increase was driven by jumps in construction and government sector openings, while the hiring rate fell to 3.3%, its lowest level since 2013, excluding the early pandemic period. The quits rate, which reflects worker confidence in finding new jobs, dropped to 1.9%, its lowest since June 2020.

• Minimum Wage: Four Canadian provinces are raising their minimum wage today. Ontario's rate increases by 65 cents to $17.20 per hour, linked to inflation. Saskatchewan’s wage rises by $1 to $15, matching Alberta for the lowest in Canada. Manitoba's minimum wage goes up by 50 cents to $15.80, while Prince Edward Island's increases by 60 cents to $16, following a previous hike earlier this year. British Columbia has the highest provincial minimum wage at $17.40, and Nunavut’s rate is the highest nationwide at $19 per hour.

• Disclosure Problems: A case now before the Supreme Court of Canada could significantly affect how public companies disclose operational changes, according to securities lawyer Frank Sur. The case centers around Lundin Mining Corp. and whether it unlawfully delayed disclosing a rockslide at one of its copper mines, which caused its stock to drop by 16%. Sur expects that the case could lead companies across various sectors to err on the side of caution by disclosing potential material changes earlier, to avoid lawsuits from investors.

Magna Mining’s PEA breakdown

The stock market and stuff

• OpenAI’s Soaring Revenue Shadowed by Billion-Dollar Losses, NYT Report Reveals (theDeepDive)

• IAMGOLD To Repurchase 9.7% Interest In Cote Gold Mine For Estimated $382 Million (theDeepDive)

• Trump Media Co-Founder Dumps Nearly Entire Stake As Company Valuation Plummets (theDeepDive)

• Verizon in $3.3 bln mobile tower deal with infrastructure firm Vertical Bridge (Reuters)

• Crypto Platform Founder Accused of Bribing Deputies in Elaborate Extortion Plot (theDeepDive)

In the juniors

• Q2 Metals Hits 1.69% Li2O Over 215.6 Metres At Cisco (theDeepDive)

• Eros Resources, MAS Gold, Rockridge Resources To Combine To Create Saskatchewan-Focused Gold Explorer (theDeepDive)

• Plurilock Secures Critical Services Contracts Worth US$1.9 Million (theDeepDive)

• Payfare: Eight Capital Estimates DoorDash Accounts For As Much As 80% Of Revenue (theDeepDive)

FULL DISCLOSURE: Sterling Metals is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Sterling Metals. The author has been compensated to cover Sterling Metals on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.