31 October, 2023

Q3 saw some recovery from the weak first half, but demand remained restrained compared with previous years

  • Gold used in technology during Q3 fell by 3% y/y to 75t 
  • The electronics sector, which dominates technology demand, fell by 4% y/y to 61t
  • Other industrial applications recorded a 4% y/y increase to 11.8t.
TonnesQ3'22Q3'23 y/y change
Other Industrial11.311.84%

Source: Metals Focus, World Gold Council

The third quarter is generally the strongest of the year for electronics demand as many major companies bring new products and devices to the market. And while this bolstered demand during Q3 this year, we expect this momentum to fade in the face of continued headwinds, chiefly ongoing weakness in consumer demand. 


Demand in the electronics industry remained relatively weak, although some sectors showed signs of recovery. New product launches and pockets of inventory building provided support during the traditionally strong Q3. But the sector faces continued challenges: Apple launched its iPhone 15 to reports of delays due to supply chain issues1, as we reported last quarter, the overall outlook for device shipments is relatively weak for the remainder of the year, with some analysts suggesting that the full year shipments for smartphones may be the lowest in a decade.2 Additionally, chip manufacturers continue to combat falling profits by adjusting facility utilisation rates to bring inventories back down to more normal levels. This adds further complexity to an already challenging landscape this quarter.

Gold demand in the Printed Circuit Board (PCB) sector improved q/q, but fell again y/y during Q3. Having fallen as low as 60-65% last quarter, PCB fabrication utilisation rates recovered somewhat in Q3 to around 70-75%, thanks to strong demand for artificial intelligence (AI) servers and automotive chips. The complexity of AI requires significant numbers of PCBs and the AI boom is likely to drive continued growth into 2024. The outlook for auto demand is less certain, as vehicle manufacturers move towards flexible and lightweight substrates, which may undermine the volume of gold used in certain applications.

Smartphone launches in Q3 lifted gold usage in the wireless sector. Demand increased both q/q and y/y, but much of this can explained by the extremely low base recorded during Q3’22 when fabrication utilisation rates were reportedly at 50%. Demand for wireless chips was strong, thanks to smartphone device launches, high performance computing and military/defence applications. However, we expect this demand to lose momentum given the weak smartphone forecast in 2023.

Gold used in Light Emitting Diodes (LEDs) fell y/y during Q3, but rose slightly q/q. New product launches in the smartphone sector drove this quarterly improvement, together with continued growth in sensor demand in the automotive market. But the longer-term outlook for gold demand in this segment is fairly weak, as competing technologies that use little or no gold begin to increase their market share. Mini-LED penetration rates are still relatively low, largely due to their prohibitive cost, but some larger devices are seeing increased adoption: mini-LED backlight TV shipments, for example, are rumoured to increase by around a quarter in 2023.

Demand for gold in the memory sector faced continued challenges, with production volumes responding to excess inventory levels. Q3 saw considerable levels of flux in this segment. Continued production cuts by memory chip manufacturers brought inventory levels down to around 10 weeks by the end of Q3, approaching a more typical level of 8 weeks. The world’s biggest memory chip manufacturer, Samsung, announced that it will continue to cut chip production as it tries to stem recent falls in profit.3 H1 production cuts of 20% for DRAM chips and 30% for NAND flash chips will reportedly increase in H2 to 30% and 40%, respectively.4 Utilisation rates in the sector remain complicated, with Chinese fabricators operating at relatively high levels in response to the ongoing tensions with the US, while utilisation rates at Korean foundries have slumped to 40-50%.

At the aggregate level, two of the major electronics fabrication hubs around the world recorded a y/y fall in gold demand during Q2: Japan (-9%) and South Korea (-19%); while Mainland China and Hong Kong SAR (6%) and the USA (2%) both registered small increases.

Other industrial and dentistry

Volumes of gold used in other industrial applications – typically in decorative applications, such as plated luxury items, costume jewellery, and gold thread used in Indian saris – was the only area of the technology sector to record growth in Q3. Demand was 4% higher y/y at 12t, in line with the five-year quarterly average. The continued post-COVID normalisation in China contributed to the strength, as did modest growth in Italy, where high-end plating demand has improved, and India. Dental demand, meanwhile, continued its long-term decline with a 6% y/y decline to 2t

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