Bloomberg reports:

A metal made from the second-most abundant element on Earth has become scarce, threatening everything from car parts to computer chips and throwing up another hurdle for the world economy.

The shortage in silicon metal, sparked by a production cut in China, has sent prices up 300% in less than two months. It’s the latest in a litany of disruptions, from snarled supply chains to a power crunch, that are creating a destructive mix for companies and consumers.

The worsening situation has forced some companies to declare force majeure. On Friday, Norwegian chemicals manufacturer Elkem said it and several other companies making silicone-based products suspended some sales due to the shortage.

The silicon issue also captures how the global energy crisis is cascading through economies in multiple ways. The slashing of output in China, far and away the world’s biggest silicon producer, is the result of efforts to reduce power consumption.

For many industries, it’s impossible to avoid the fallout.

Silicon, which makes up 28% of the earth’s crust by weight, is one of mankind’s most diverse building blocks. It’s used in everything from computer chips and concrete to glass and car parts. It can be purified into the ultra-conductive material that helps convert sunlight into electricity in solar panels. And it’s the raw material for silicone — a water- and heat-resistant compound used widely in medical implants, caulk, deodorants, oven mitts and more.

Despite its natural abundance in crude forms such as sand and clay, there have been warnings in recent years that surging industrial demand risks creating improbable shortages for raw materials like gravel. Now, with China curbing production of high-purity silicon metal, the unlikely fragility of the silicon supply chain is being exposed to an alarming degree. [Continue reading…]