Gold demand from the electronics sector hit 78.3 tonnes in the second quarter, a 4% year-over-year increase from 65.8 tonnes in the same period last year. The growth came largely from AI infrastructure spending, which offset a sharp slump in consumer device shipments.
What's behind the rise
The electronics sector accounts for the majority of gold used in technology. Demand climbed thanks to AI server mainboards, integrated circuit substrates, and printed circuit boards for low-earth orbit satellites. Memory and semiconductor use also rose, driven by a surge in AI memory demand. Automotive lighting contributed as well — gold wire and gold-tin bonding remain standard in vehicle head and tail lamps because of heat and vibration requirements.
Where demand fell
Not all segments fared well. High gold prices accelerated thrifting and substitution in low- and midrange consumer electronics. IDC forecasts smartphone shipments falling 13.9% in 2026 to 1.09 billion units, the steepest annual drop on record. Other industrial and decorative gold use fell 7% to 10.1 tonnes, a ninth consecutive annual decline. Dentistry gold use slipped 6% as ceramic alternatives gained ground.
Technology gold demand overall was 80.4 tonnes out of total gold demand of 1,269 tonnes. Central bank gold buying supplied 289 tonnes over the same period, highlighting continued institutional appetite for the metal.
Risks to the outlook
A key downside risk is that weaker AI returns or an electronics downturn could remove the support currently offsetting the smartphone slump. If AI investment slows, the electronics sector's gold demand could drop sharply, leaving the market more exposed to consumer weakness.
The next quarterly data will show whether AI-driven demand can sustain its momentum or whether the broader electronics downturn will catch up.
