Gold used in technology grew 1% to 85.3t in Q3, the eighth consecutive quarter of y-o-y growth. This uptick was again driven by strong electronics demand, particularly in the PCB and memory sectors, offsetting a surprising decline in wireless demand.
Gold used in electronics grew 2% y-o-y to 68.5t in Q3. The memory sector continued its recent strong performance, with growth estimated to be in the region of 2-5% overall. This was driven by strong demand from servers and smartphones, both of which require ever growing amounts of memory. This strength, however, was tempered by softer demand from crypto mining infrastructure and production capacity issues, which led to CPU shortages in some markets.
Echoing Q2, the strong server market again supported demand for PCBs. Together with growth in the automotive industry and 5G infrastructure deployment, gold used in PCBs was estimated to be 5-7% higher y-o-y. But this sector could face challenges. Tightening environmental regulations in China regarding cyanide usage may indicate a headwind for PCB production, and growing concerns over the US-China trade dispute may impact future growth.
Recent growth in wireless demand was brought to a halt in Q3. Vertical cavity surface emitting lasers (VCSELs) – one of the key technologies in the sector – experienced a considerable decline in demand because of slower than expected penetration of smartphone face identification functionality, leading to falls of 5-8%. However, we believe this may be a temporary blip and expect recovery in the near term as major smartphone manufacturers use up over-supplied inventory.
The LED sector once again registered a drop in demand, with gold volumes 5-8% lower y-o-y. The continuing transition to gold-free chip scale packaging (CSP) weighed on the numbers during Q3. And further challenges are on the horizon, with the US-China trade dispute one of the most pressing. Potentially, dozens of LED lighting products could be subject to increased export duties, and this may affect the entire supply chain. The potential impact on gold demand is currently unknown but developments are being watched with interest.
The traditional technology hubs of Mainland China and Hong Kong, Japan and the US all registered growth in gold volumes in Q3, with 1.9%, 1.0% and 3.0% respectively. Minor falls in demand were registered in Taiwan and Singapore, both relatively small players in the sector.
Other industrial and dentistry
Dental demand continued its steady decline, recording a 5% fall y-o-y to 3.9t. This is the first time demand has fallen below the 4t mark. Other industrial uses registered a small increase of 1% y-o-y, taking it to 12.9t for the quarter.
Gold itself remains a key metal in R&D activities, as shown by the recent GOLD2018 conference held in Paris in July 2018; over 500 attendees from around the world gathered to share their gold-based research, with many examples of technologies moving towards commercialisation.