30 October, 2024
| Tonnes | Q3'23 | Q3'24 | Year-on-year % change |
|
| Technology | 77.3 | 83.0 | 7 |
|
| Electronics | 63.3 | 69.0 | 9 |
|
| Other Industrial | 11.7 | 11.8 | 1 |
|
| Dentistry | 2.3 | 2.2 | -4 |
|
Source: Metals Focus, World Gold Council
The third quarter is generally the strongest for electronics demand as many major electronics companies launch new products and devices onto the market. This year has been no different, with all major smartphone manufacturers unveiling new products. However, demand was reportedly slightly lower than expected – Samsung reported a drop in devices shipped, for example1 – and the industry is consequently taking a cautious approach to both current inventories and future sales forecasts.
Demand in the electronics space strengthened during Q3, but the industry is taking a cautious stance for the remainder of the year. According to the market intelligence company IDC, smartphone shipments registered a fifth consecutive quarter of growth: 316 million units shipped during the period, with particular strength in East Asia. IDC also reported that shipments of traditional PCs will remain flat in 2024, pointing to economic concerns in China, but with a potential long-term boost as users upgrade to AI-enabled devices.2 In Europe and the US, weaker sales in the automotive and aerospace sectors have led manufacturers to impose stricter controls on material inventories.
Gold used in printed circuit boards (PCBs) registered another strong quarter. AI remains the main driver of this trend, with AI-enabled servers requiring high-performance PCBs. Automotive electronics also use high-end PCBs to guarantee reliable operation in safety critical functions. Another growing area of demand is low Earth orbit (LEO) satellites, which represent a potential long-term source of demand for gold from both PCB and wireless components.
Gold used in light emitting diodes (LEDs) rose slightly during Q3. This was fuelled by increased adoption in the automotive sector, where the reliability of LED is a key advantage. Demand for high-end IR-LED products continues to grow steadily in a broad range of application areas related to sensing and industrial automation, which is positive for gold demand. But mini-LED usage made further inroads into the traditional LED market albeit at a fairly slow rate.
Demand for gold in the memory sector also recorded a small rise. This was driven by strong demand for high-end products such as high-bandwidth memory (HBM) for data centres and high-performance computing (HPC). But growth in mid- to low-end demand was suppressed by inventory bottlenecks in the consumer electronics supply chain. Intense competition has seen considerable flux in the sector, with the world’s largest manufacturer Samsung coming under huge pressure from rivals such as SK Hynix and Micron. Indeed, Micron recently reported exceeding US$1 billion in quarterly revenue from NAND chip production for the first time.3
Ongoing adoption of 5G-enabled smartphones lifted gold usage in the wireless sector. The proportion of smartphones compatible with generative AI (GenAI) and featuring WiFi-7 also increased. Current projections indicate that shipments of these will make up 20% of the market by the end of the year.4
The three major Eastern electronics fabrication hubs saw a y/y increase in Q3 gold demand: Japan (20%), South Korea (20%) and Mainland China and Hong Kong SAR (10%). Meanwhile, the USA (-4%) recorded a decrease.
Other industrial applications recorded a small y/y increase during Q3 as gains in East Asia offset a negative price reaction in India and destocking in Italy. Dental demand saw ongoing structural losses.
