Technology Sector Has a Growing Appetite for Gold; Demand Up 3%

by Peter Schiff, SchiffGold:

The amount of gold used in the technology sector grew for the fourth consecutive quarter, according to the latest demand report by the World Gold Council.

Tech industries consumed 67.3 tons of gold in Q3, a 3% increase year-on-year. Demand for memory chips served as a primary driver for increased industrial gold consumption.

All main sub-sectors registered growth. Continued strength in the memory sector – where supply remained very tight and demand high – underpinned a 12 to 15% increase in demand for gold bonding wire in Q3. Samsung Electronics credited ‘strong demand for …memory chipsets…and flagship mobile devices’ as a key contributor to its record Q3 net profit. The prolonged shortage in memory chips is expected to persist into 2018 as factories struggle to increase output sufficiently to meet demand for high-end smartphones. We believe this bodes well for the short-term outlook for gold bonding wire.”

World Gold Council head of market intelligence Alistair Hewitt told the Telegraph that tech companies spent several years trying to find substitutes for gold in order to save money, but that trend seems to have ended.

Since 2010, technology manufacturers have gone through an exercise of thrifting – that has eroded gold use in tech. That trend appears to have gone into reverse, as some device makers realize they can no longer scrimp or substitute gold while maintaining quality Gold has certain features that means it lends itself really well to tech. It’s highly conductive, it doesn’t corrode or tarnish, and it’s highly malleable.”

Gold used in wireless applications also helped push overall tech demand higher, growing by around 8% y-o-y in Q3. Demand for 3D sensors used in facial and gesture recognition surpassed expectations, according to the WGC.

In our view, their wider applications in gaming, vehicles, and healthcare industries will continue to generate growth.”

The surging demand for gold provides more evidence of the yellow metal’s expanding role in the world of high-tech. We generally think of gold as an investment as well as money, but it is increasingly being used in high-tech applications from energy production to healthcare. There have been a number of interesting developments utilizing gold just over the last few months.

Scientists have moved closer to developing a process to manufacture Perovskite solar cells (PSCs). PSCs offer an alternative to much more expensive silicon panels. The problem is they don’t hold up well in the outside elements. According to Science Alert, researchers have developed a substance using gold that stabilizes PSCs and makes them more efficient.

The team found a way to sandwich a spacer of graphene oxide and a thin gold contact between a 60-nanometre thick slice of CuSCN and a layer of perovskite. As a result, the PSC could now deliver the goods for over 1,000 hours in 60 degree Celsius (140-degree Fahrenheit) heat, at a cost of just 5% in its maximum efficiency.”

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