After climbing 1% to a four-year high of 334.6t, gold used in technology fell to 84.1t in Q4, the first y-o-y fall in quarterly demand since Q3 2016. Slowing growth in some major economies combined with the ongoing trade dispute dampened electronics demand.
Electronics
Gold used in electronics rose 1% to 268.3t in 2018. Growth in demand for high-end consumer electronics and vehicle electrification throughout much of the year fuelled the rise. But this came to a halt in Q4, when demand fell 5% y-o-y, to 67.8t, on slowing smartphone sales and delays in the rollout of the 5G network. Indeed, recent profit warnings issued by Apple put this into some perspective; a 15% y-o-y fall in iPhone sales during Q4, with the prediction of even sharper falls in 1H19, are having a significant impact on the broader electronics sector.
Traditionally a low season for LEDs, Q4 2018 was particularly weak: the volume of gold used in these applications was 8-10% lower y-o-y. Ongoing US-China trade friction weighed heavily on the LED sector: more than 30 lighting applications are now subject to additional duties, as a result of which some production has shifted out of China. Increased penetration of Chip Scale Package (CSP), particularly in the automotive field, also exerted some pressure on gold usage in this sector.
After repeated quarters of strong demand, the memory sector also slowed in Q4. The smartphone slowdown had an impact here, as did the ongoing shortage of Intel CPUs, which had a negative knock-on impact on DRAM demand. As seen in the LED sector, technology migration is also a threat; for example, Through-Silicon-Via (TSV) may become the interconnection solution in larger 3D NAND packages, thus potentially further hampering gold usage in these applications.
The one bright spot in an otherwise challenging quarter came from the Printed Circuit Board (PCB) sector, which registered a rise of 1-4% y-o-y. This was driven by strong demand in the automotive sector and 5G infrastructure, which is also expected to catalyse PCB requirements this year in various applications, especially for integrated boards in wireless communication modules and power management (to meet rising data transfer demand).
The key eastern fabrication hubs of Mainland China and Hong Kong, Japan and South Korea all registered falls in gold volumes during Q4, with 9.6%, 9.5% and 4.9% respectively. The US bucked this trend with a 4.5% increase.
Other industrial and dentistry
Dental demand registered it’s fourteenth consecutive annual decline, falling 6% y-o-y to 15.4t. Other industrial applications, by contrast, grew 1% to 51.0t, due to improvements in plated jewellery demand in some areas.
