Overall demand for gold in technology was marginally firmer at 78.5t in Q1. This was slightly exaggerated, however, by Q1 2016 having been the lowest quarter on record (at 76.4t).
Gold used in electronics grew 4% y-o-y to 62.1t in Q1. Growth came from the increasing wireless capabilities of smartphones, as well as robust demand for gold bonding wire. After a period of heightened activity in the second half of 2016, demand for gold bonding wire remained resilient in the first quarter of 2017. Strong demand for memory chips helped to offset the negative impact of 3D packaging1, which uses much lower volumes of bonding wire. Continued progress in reducing the diameter of bonding wire and advances in 3D packaging are, however, likely to dominate the sector over the coming quarters.
Developments in the wireless sector were positive for gold usage, many of which were related to smartphone technology. Increasingly, smartphones are expected to offer wireless charging capability. This bodes well for demand for Printed Circuit Boards (PCBs), a component of wireless chargers. Additionally, a more high-end application of gold in smartphones involves the inclusion of vertical-cavity service-emitting lasers (VCSEL)2, which are used in gesture recognition, 3D sensors and 3D video applications. The iPhone 8 – expected to launch later this year – is rumoured to include this technology. These positive trends should offset the effect of the downturn in demand for smartphones.
The LED sector underperformed in Q1, hit by thrifting as miniaturisation continued to take hold. Growth in demand for infrared LED automobile lighting was not enough to offset the effect of the switch to Chip Scale Packaging (CSP)3 in the sector.
Several key Asian markets saw a y-o-y recovery in electronics demand: China grew around 7%, albeit from a low base, while Taiwan was steady, marginally firmer by around 1%. South Korea benefitted from the growth in PCB and memory production, turning in growth of around 3%.
Scientists worldwide continue to uncover new applications for gold that will lead to future sources of demand for the metal. US and UK researchers published a seminal paper in the leading journal Science describing insight into the working of an important gold catalyst currently in production in China.4 The research identified how gold particles within the catalyst drive the formation of an industrially important feedstock chemical. This insight promises to lead to the development of improved gold catalysts for the chemical industry.
Separately, researchers at Missouri University of Science and Technology have developed a new way of using gold to transform “flexible” or wearable technology. By growing thin layers of gold on a single crystal wafer of silicon, they discovered that they could preserve all the positive characteristics of silicon while adding the benefit of gold’s greater durability and flexibility.