Gold Demand Trends Q2 2017

Published 3rd August 2017

Technology

Gold used in technology rose 2% y-o-y, driven by growth in demand for bonding wire, Printed Circuit Boards (PCBs) and LEDs

  • Strong memory chip demand generated double-digit y‑o‑y growth in gold bonding wire
  • Demand for LEDs, particularly in the automotive sector, continued its recovery
  • PCB usage was buoyed by continued adoption of wireless charging and ongoing smartphone demand
Tonnes Q2'16 Q2'17 YoY
Technology 80.1 81.3 2%
Electronics 63.0 64.3 2%
Other Industrial 12.5 12.7 1%
Dentistry 4.6 4.3 -5%

Overall demand for gold in technology was 81.3t in Q2, marking the third consecutive quarter of y-o-y growth.

Electronics

Gold used in electronics rose 2% y-o-y to 64.3t in Q2. Bright spots were seen across key sectors, from bonding wire to LEDs and PCBs. The bonding wire sector grew by 11% y-o-y. Tight supply of memory chips, at a time of strong demand, saw manufacturers producing at full capacity. We expect supply conditions to remain tight throughout 2017; a situation that may be exacerbated by the expected launch of new generation smartphones in the latter part of the year. As a point of reference, Samsung expected its Q2 operating profit to increase 72% y-o-y due to the seemingly insatiable global demand for memory chips. 

LED demand continued to recover, showing steady improvement in the automotive sector in particular, where LEDs are used extensively in sensor technology. New features, such as collision avoidance and intelligent sensing, rely on state-of-the-art sensor chips containing gold. Additionally, an industry upgrade to Organic LED lighting – with its versatility and energy saving benefits – is expected to lend further support to gold demand and could help offset the switch to gold-free Chip Scale Packaging (CSP) seen in the sector.1

PCBs, which enjoyed positive spill-over benefits from strong smartphone shipments, continued to benefit from increasingly widespread adoption of wireless charging. The wireless sector remained resilient as leading smartphone manufacturers, such as Samsung and Huawei, placed healthy orders for new models scheduled for release in H2. Electronic demand in both China and South Korea grew 6% y-o-y. Meanwhile, Japan lost 3% as its market share in bonding wire was eroded by China and Taiwan.

Research into new applications for gold continued to grow: Q2 saw healthy numbers of patent applications and research articles across a broad range of sectors. ’Two faced’ spherical particles, where one face is made of gold layers topped by silver nanoparticles, have been designed to trap bacteria in contaminated water and transform it into clean and safe drinking water. And researchers at Osaka University have developed a material coated with gold nanoparticles with the aim of improving conversion of sunlight into clean energy.

Footnotes:
  1. OLED technology uses a series of thin, light-emitting films rather than an array of individual LED bulbs, to produce brighter light while using less energy.