"The Inside Story of the Great Silicon Heist"

From Wired, September 26:

Wasi Ismail Syed had endured a draining day of travel by the time he picked up his rental van at the Pensacola, Florida, airport. He’d left his West Coast home that morning in February 2009, then weathered a lengthy layover in Houston. But rather than pining for a comfy hotel bed, Syed was excited to conduct a bit of late-night business: He was meeting two strangers who called themselves Butch Cassidy and William Smith outside a nearby Walmart.

As he pulled into the store’s parking lot around midnight, the 32-year-old Syed worried that he might be robbed of the $28,000 he was carrying. Cassidy and Smith were already there, waiting for him in a pickup; Syed jotted down its license plate number in case the meeting went sideways. But his worries eased when he shook hands with the two men, who struck him as harmless blue-­collar sorts: Both were in their mid-­fifties with bushy mustaches and receding hairlines, and they spoke in a honeyed southern drawl. Syed sensed they were every bit as nervous as he was.

In a well-lit corner of the parking lot, Cassidy and Smith unloaded the 5-gallon painter’s buckets that filled their truck. Syed pried open one of the buckets’ lids and peered inside. He was pleased by what he saw: a pile of rock-like chunks of a silvery metallic substance. These were fragments of polycrystalline silicon, a highly purified form of silicon that is the bedrock for semiconductor devices and solar cells. Nearly every microchip on earth is forged from the material. And at that moment, due to a global shortage, the average price for freshly manufactured polycrystalline silicon, commonly known as polysilicon, had climbed to $64 a pound.

Syed operated on the periphery of the polysilicon industry as a trader in scrap. He had built a $1.5 million–a-year company by paying cash for any kind of processed silicon he could get his hands on: debris from chip fabricators, broken solar cells, cast-off shavings from the plants where polysilicon is made. He would flip these materials to customers who typically shipped them to China, where scrap silicon is refurbished in noxious chemical baths and recycled into new products. Syed was accustomed to cutting deals with odd characters who’d lucked into their silicon and were eager for money; he never asked many questions about the provenance of their goods.

Cassidy and Smith’s buckets contained 882 pounds of polysilicon, all of which looked to be of relatively good quality. But Syed knew he couldn’t just trust his eyes—it’s easy to get ripped off in the scrap trade. He spent 30 minutes sweeping a handheld resistivity tester over the chunks, to make sure there weren’t any duds mixed into the merchandise. All of the pieces scored above 1 ohm, meaning they were plenty pure enough to be sold to the Chinese for solar panels.

Convinced that he wasn’t being conned, Syed handed over his cash-stuffed envelope and lifted the buckets into his van; he planned to FedEx the product to his customer the next day before flying home. Just before driving away, he asked Cassidy and Smith whether they could get him any more polysilicon at a similarly attractive price. The two older men said they would be in touch.

The moment they got back in their truck, Cassidy and Smith divvied up the cash they’d just earned from their first-ever polysilicon sale—a deal in which almost every dollar was profit. The pair could see they’d stumbled into a potential fortune. And despite the risks they were taking, this was an opportunity they couldn’t pass up.

The 3-mile-long Theodore Industrial Canal is not quite as charmless as its name suggests. Created by an epic dredging operation that began in the late 1970s, the sun-dappled waterway on the outskirts of Mobile, Alabama, attracts small fishing boats and brown pelicans that compete for speckled trout. But the sights and smells of less salubrious activity are impossible to avoid. The canal is ringed by a cement factory, a dock where grimy ships are scrubbed, and a phenol plant that caught fire in 2002. A mile farther west, outside a plant that uses hydrogen cyanide to produce a chicken feed additive, the water sometimes has a sickly green-brown hue, and the air can smell vaguely of ammonia. At the end of the canal, behind a rusting benzene barge and a copse of pines, loom the slender distillation towers of Mitsubishi Polycrystalline Silicon America Corporation.

The Mitsubishi plant is arguably the most high tech member of South Alabama’s “chemical corridor,” a 60-mile stretch that teems with manufacturers of everything from protective coatings to artificial sweeteners to insecticides. After the closure of a massive Air Force base ravaged Mobile’s economy in the early 1970s, state and local governments decided to reinvent the region as a hub for chemical companies, which often situate their plants by rivers, lakes, and bays. (Water is crucial to chemical production as an ingredient, a coolant, and a receptacle for waste.) Today, Mobile’s sales pitch to the likes of DuPont and Evonik touts the area’s weak unions, abundant rail lines, and—crucially—openness to projects that might run into opposition in more green-minded locales.

The Japanese-owned Mitsubishi polysilicon plant, which opened in the late 1990s, hasn’t committed any major environmental sins, but it does burn through vast amounts of energy. The plant’s feedstock is metallurgical-grade silicon, which can be extracted from pulverized chunks of quartzite. In this raw form, silicon exhibits the properties that make the element so essential to the tech industry: It can both conduct and resist electricity—hence the term semiconductor—even at high temperatures. But metallurgical-grade silicon is far too tainted with flecks of iron, aluminum, and calcium to be usable in high tech products that are expected to perform flawlessly for years on end. The material must thus be chemically refined, a process that begins by mixing it with hydrogen chloride at more than 570 degrees Fahrenheit.

After having its impurities removed through multiple rounds of distillation, the resulting hazardous compound, called trichlorosilane, is pumped into a cylindrical furnace containing 7-foot-tall silicon rods shaped like tuning forks. Hydrogen is then added and the temperature is turned up to more than 1,830 degrees Fahrenheit. This causes hyper-pure crystals of silicon to leech out of the trichlorosilane and glom onto the rods. After several days the rods are thick with grayish polysilicon, which is then cut into foot-long cylinders, cleansed with acids until glittery, and packaged in thermally sealed bags for shipment.

When the vast majority of manufacturers reach the end of this process, their polysilicon is as much as 99.999999 percent pure, or “8n” in industry parlance. This means that for every 100 million silicon atoms, there is but a single atom’s worth of impurity. While that may sound impressive, such polysilicon is only pure enough for use in solar cells—relatively simple devices that don’t need to perform complex calculations, but rather just create electrical current by letting sunlight agitate the electrons in silicon atoms. (About 90  percent of all polysilicon ends up in solar cells.)

What the Mitsubishi plant in Alabama produces, by contrast, is 11n polysilicon, marred by just one impure atom per every 100 billion silicon atoms. This polysilicon, known as electronic-grade, is destined to be made into the wafers that serve as the canvases for microchips. Wafer makers melt down 11n polysilicon, spike it with ions like phosphorus or boron to amplify its conductivity, and reshape it into ingots of monocrystalline silicon. These ingots are then sliced into circular pieces about a millimeter thick, at which point they’re ready to be festooned with tiny circuits inside the clean rooms of Micron or Intel.

Mitsubishi’s facility on the Theodore Industrial Canal is one of fewer than a dozen plants worldwide that produce 11n polysilicon. “The barriers to getting to that sort of purity level are extremely high,” says Johannes Bernreuter, founder of a German research firm that covers the polysilicon market. “You have to imagine how many atoms there are in a cubic centimeter of polysilicon, and how only a few atoms of impurity in there can ruin everything.”

There has been no single key to Mitsubishi’s technical success with 11n polysilicon. Insiders credit not only the precision of the engineers who oversee the daily minutiae of the manufacturing process but also the attention that was paid to building the plant and its components to exacting specifications. Yet Mitsubishi’s meticulousness does not seem to have extended to the more elementary task of security....MUCH MORE