28 April, 2022

A healthy first quarter but new challenges loom in 2022

  • Gold demand in the technology sector rose by 1% y-o-y to 82t during Q1, the highest total for a first quarter since 2018
  • Demand in the electronics sector continued to recover, rising 1% y-o-y to 67t
  • Other industrial applications also experienced a modest increase, rising 1% y-o-y to 12t, while dental demand continued to decline with a fall of 7% y-o-y to 3t.
Tonnes Q1'21 Q1'22   YoY % change
Technology 81.0 81.7 1
Electronics 66.2 67.0 1
Other Industrial 11.9 12.0 1
Dentistry 2.9 2.7 -7

Source: Metals Focus, World Gold Council

The first quarter of 2022 saw modest growth in demand for gold in technology but challenges remain. The electronics market has broadly recovered from the blow dealt by the pandemic, but the pace of growth slowed in Q1 and the sector continues to face headwinds.

COVID-19 remains a concern; currently dozens of cities in China are under total or partial lockdown, with major industrial and financial hubs such as Shanghai impacted.1 China’s zero-COVID policy also coincided with the Chinese New Year holiday, and this will potentially impact the electronics supply chain throughout 2022.

The electronics industry faces further challenges from the ongoing conflict in Ukraine. Most major electronics firms quickly halted shipments to Russia after the invasion, effectively suspending sales. This, alongside rapidly rising inflation in many parts of the world, is impacting the outlook for the consumer electronics sector, where manufacturers have already begun to limit orders of certain components in anticipation of slowing consumer demand. One such example is Apple’s recent decision to make 20% fewer iPhone SEs during Q2 than originally planned, and to reduce AirPod and iPhone 13 orders.2 PC shipments have also begun to falter, with Chromebook sales suffering notable falls from the highs of early 2021.3

Finally, certain sectors are vulnerable to continued substitution and miniaturisation, although it is important to note that gold remains a crucial material in the drive towards electrification in the modern world.

In summary, the combination of COVID-19 outbreaks in China, the conflict in Ukraine and inflationary pressures has unsettled the electronics supply chain. The sector saw slower growth in Q1 and is subject to greater uncertainty in the near term as manufacturers adjust inventories in response to slowing shipment forecasts.


Gold used in the electronics sector strengthened during Q1, extending the recovery from the 2020 drop. Demand for big-ticket items such as vehicles and high-end consumer electronic devices remained strong, although the chip shortages that have plagued much of the sector continue to temper automotive sales.4  And challenges such as the conflict in Ukraine and soaring inflation are starting to impact demand, dampening near-term forecasts.

Demand for Printed Circuit Boards (PCBs) remained healthy during Q1. Some of this was due to order deferrals from Q4’21, when strong orderbooks led to deliveries spilling over into Q1’22. However, new demand was undoubtedly strong with servers, routers and high-speed computing all experiencing growth. Multilayer PCBs5 also reportedly performed well, with strong demand from the automotive sector.

Gold used in Light Emitting Diodes (LEDs) experienced a small fall in demand during the quarter as inventory adjustments limited new orders. This was particularly apparent in backlighting applications, such as laptops, where demand is currently falling after the highs seen in 2021. The shift to mini-LED technology (which, in some cases, uses less gold) continues, with companies like Apple reportedly expanding the supply chain capacity of mini-LED panels for their MacBook Pro device.6 However, the impact on the broader market is unlikely to be significant, with mini-LEDs forecast to double their LED market share in 2022 from just 2% to around 4%. There are bright spots in the sector, however. Demand remained strong for high-end LEDs such as UV-LEDs and IR-LEDs, both of which are used in increasingly popular healthcare applications, such as skin sensors and heart rate-tracking functionality built into watches and smartphones. And, continued growth in the electric vehicle market is likely to support future demand for traditional LEDs.

Demand for gold in memory chips saw only a small increase, suggesting a cooling of demand in the sector. The strong growth observed in recent quarters tailed off during Q1, and forecasts for DRAM shipments in the near term are conservative thanks to manufacturers building up healthy inventories. Demand for high-end graphics cards continued to fall in the face of volatile cryptocurrency prices.7 Additionally, in a blow to two major memory chip manufacturers – Western Digital and Kioxia  – more than 8% of the world’s NAND flash storage production for the first quarter was lost because of material contamination during the fabrication process at two facilities in Japan.8 Looking forward, faltering consumer electronics demand may lead to further inventory adjustments and price falls in the sector, while the threat of miniaturisation in NAND chips remains, as major manufacturers work to develop new architectures that may need smaller quantities of connecting gold bonding wire. Both these issues could further impact the market in Q2 and beyond.

Finally, the wireless sector recorded a rare, albeit small, decline in demand during Q1. This was primarily a consequence of adjustments to deal with high inventory levels of power amplifiers in the softening smartphone market – which is the largest single source of demand within the wireless sector. Demand from 5G infrastructure projects, however, remains strong, and the longer-term outlook in the automotive sector is equally positive as electrification continues unabated. 

At the aggregate level, two of the four major electronics fabrication hubs around the world recorded increases in gold demand during Q1: South Korea and the US saw increases of 4.9% and 3.2% respectively, while Japan and Mainland China & Hong Kong SAR registered small declines of 1.2% and 0.3% respectively. 

Other industrial and dentistry

Other industrial applications recorded a small y-o-y increase of 1% to 12t during Q1, much of which was due to Italy, which saw strong demand for plating among the high-end brands. Growth would have been higher but for losses in a range of countries, including Turkey and India, where demand was undermined by March’s high prices and general uncertainty.

In contrast, dental demand fell 7% y-o-y to 3t. This signals a return to the more typical long-term decline, with losses mainly due to structural changes and the continued shift to lower cost, non-precious metal alternatives.

Important disclaimers and disclosures [+]Important disclaimers and disclosures [-]