Gold demand in tech sector up 9 per cent
News Arnulf Hinkel, Financial Journalist – 03.12.2021
While gold demand in the technology industries decreased by 7 per cent year-on-year in 2020, it saw a strong recovery in 2021, according to the World Gold Council’s quarterly Gold Demand Trends data. After rising 11 per cent year-on-year in Q1 2021, gold demand increased by as much as 18 per cent in Q2. In Q3, growth slowed to 9 per cent but continued the positive trend for 2021 in the technology sector.
Home office and product innovations drive electronics industry
The technology sector needed more gold quarter-on-quarter, especially for semiconductor and circuit board production as well as for wireless applications. Among other factors, this increase in demand was fuelled by the trend towards working remotely, intensified by the pandemic and leading to new investments in data processing and telecommunications. In addition, wireless communication and consumer electronics product innovations drove demand. With a 12.3 per cent increase in demand, US-based technology firms benefited most from this development, followed by companies in China with 10.3 per cent and South Korea with 9.4 per cent. Gold demand for other industrial applications saw a 10 per cent rise in the third quarter of 2021.
Challenges ahead
Increasing shortages, specifically in semiconductor production, may jeopardise the continuation of the positive trend prevalent since early 2021. Recent World Gold Council data shows that September car sales in China have already been impacted. Also, one of the world’s largest smartphone manufacturers recently indicated that up to 10 million fewer new products may be delivered in 2021 due to the current chip shortage. Further developments will depend on how quickly semiconductor manufacturers are able to return to pre-pandemic production levels or higher.