31 January, 2023

Worsening global economic conditions in Q4, together with trade restrictions and supply chain issues, generated a sharp drop in full-year gold technology demand

  • A substantial drop in Q4 compounded Q3 weakness to generate a 7% decline in annual demand for gold in technology
  • Electronics demand mirrored the 7% annual decline in the broader sector, dropping sharply in Q4 in response to the deteriorating global economic picture and supply chain challenges, particularly in China
  • Gold used in other industrial applications was flat for the year.
Tonnes 2021 2022   YoY % change
Technology 330.2 308.5 -7
Electronics 272.1 251.7 -7
Other Industrial 46.8 46.6 0
Dentistry 11.4 10.3 -9

Source: Metals Focus, World Gold Council

The start of 2022 followed a similar pattern to 2021 as businesses, supply chains and consumers continued to recover from the pandemic. Gold demand followed suit, remaining steady during the first two quarters. However, Q3 and Q4 saw a sharp reversal driven by rapid changes in the global economy; interest rates were quickly raised by central banks worldwide in an attempt to temper soaring inflation, impacting the finances of consumers and businesses globally.

During Q4 the electronics supply chain, still suffering some uncertainty in the wake of the pandemic, was further pressured by events in China where the sudden easing of COVID restrictions led to a large wave of infections and resultant labour shortages across a number of sectors.1 This compounded other challenges faced by semiconductor manufacturers in the country; most notably the US-imposed sanctions on chip manufacturing and intellectual property.2


Gold used in the electronics sector fell 18% y-o-y to 58t during Q4. This is the largest quarterly y-o-y fall in the sector since 2009 – a direct consequence of the unprecedented combination of challenges the industry is currently facing. Smartphone shipments provide a relevant snapshot; recent reports suggest y-o-y falls of 17% in Q4 and an 11% decline in annual shipments for 2022.3

Demand for gold slumped in the Light Emitting Diode (LED) sector. Backlight applications were hit particularly hard, not only by waning consumer demand but also by manufacturers slashing orders to reduce already extensive inventories, left bloated by sluggish smartphone sales. PC shipments fell by 28% during the quarter, the sharpest decline recorded in three decades.4 This combination of factors reportedly drove capacity utilisation rates down below 70%, the lowest in a decade. Demand for high-end LEDs (e.g. UV-LEDs and IR-LEDs used in healthcare applications like skin sensors and heart-rate-tracking in watches and smartphones) also fell on the back of US import restrictions and a slowing real estate sector, which is dampening demand for high-end household electronics. The only relatively positive area of LED gold demand was in the automotive sector, but it has been reported that mini-LEDs (which do not require gold bonding wire) are becoming more widely qualified by the industry and are likely to become increasingly common in new vehicles.

Gold demand in the wireless sector also experienced a major decline during Q4. Weak smartphone demand and US sanctions against Huawei left device manufacturers with large inventories of power amplifiers, forcing them to adjust their orders down accordingly. This in turn reportedly led to falling utilisation rates at major chip manufacturers such as WIN Semi and TSMC. Other application areas, including uses in low Earth orbit satellites (LEOS)5 and light detection and ranging (LIDAR)6, were not as heavily impacted. But as these make up only a small proportion of wireless demand, this relative strength did not offset falls in the consumer electronics segment. However, power amplifier inventory adjustments are forecast to be completed towards the middle of 2023 and the longer term need for high-end wireless chips in various applications will almost certainly spur a recovery in demand.

Gold demand in the memory sector fell further during Q4. The weak PC and smartphone shipments described above weighed on the memory sector and led many device manufacturers to focus on inventory reduction. The ongoing declines in crypto mining – accelerated by the crisis that hit the crypto market during Q4 – also continue to pressure high-end graphics card demand. Major memory chip manufacturers, such as Micron and SK Hynix, reduced output and also delayed the introduction of new technology. And it has even been rumoured that some memory chip manufacturers, such as YMTC, may have to exit the market altogether as a consequence of US sanctions.7

Finally, gold used in Printed Circuit Boards (PCBs) saw heavy declines in China, but small increases elsewhere. China dominates global PCB capacity (at ~45%), so the challenges the country is currently facing inevitably impact the entire market, especially while demand for consumer electronics is depressed. However, capacity utilisation rates remain high and overall supply and demand remains balanced. Additionally, emerging applications in the automotive, aerospace and high-speed computing sectors are likely to support demand and stimulate a recovery during the second half of 2023.

In summary, a period of challenge lies ahead for the electronics industry. In November, the World Semiconductor Trades Statistics group amended its forecasts, anticipating that growth in the global semiconductor industry would slow dramatically in 2022 before declining 4.1% during 2023 as “inflation rises and end markets [see] weaker demand, especially those exposed to consumer spending”8. Analysts also reduced shipment forecasts for many manufacturers, including Apple, on the back of weak consumer sentiment and supply chain issues.9

At the aggregate level, three of the four major electronics fabrication hubs around the world recorded significant decreases in gold demand during Q4; Mainland China and Hong Kong SAR, South Korea and Japan recorded figures of 12t (-39%), 6t (-22%) and 17t (-19%) respectively. Demand in the US bucked this trend, recording 4% growth to 16t, benefiting from an expansion in domestic production capacity and the supply chain being free of pandemic disruption throughout 2022.

Other Industrial and dentistry

Other industrial applications fell by 5% y-o-y to 12t in Q4, almost exclusively as a consequence of the ongoing disruption in China. The small increases reported in Italy recently came to a halt as brands became increasingly cautious. Full-year demand remained flat at 47t.

Dental demand once again fell to a new quarterly low, declining 11% y-o-y to 2t on the back of further structural decline across all major markets. Annual demand fell 9% to 10t.


  1. LEO satellites operate in a revolving network relatively close to the earth’s surface, and can provide internet coverage in remote locations. They require reliable high-end wireless infrastructure.

  2. LIDAR sensors uses lasers to bounce off objects and return to their source, measuring distance by timing the travel, or flight, of the light pulse. They are becoming increasingly common in high-end smartphone applications and will be critical to the development of autonomous vehicles.

  3. Reagents are key chemicals used in mineral processing.

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