Silver surges 30%, forcing "less silver usage," and companies start material substitution competition

Silver’s opening year increase has exceeded 30%, breaking the $95 mark to hit a new all-time high. This surge not only dominates investment circles but also directly impacts the global industrial supply chain. As the most conductive metal in the industrial sector, silver’s demand in key industries such as photovoltaics and chips has surged, while supply gaps continue to widen. Under the pressure of high silver prices, many listed companies have begun accelerating the exploration of “less silver” and “de-silvering” technologies. This material substitution race has officially begun.

Silver is Going Crazy, but Industrial Demand is Even Crazier

According to the latest news, the sharp rise in silver prices is driven by the strong resonance of two forces.

Dual resonance of risk aversion and industrial demand

On one hand, rising geopolitical risks, clear expectations of Federal Reserve rate cuts, and an increasing trend of global central banks de-dollarization have boosted silver’s financial value as a safe-haven asset. The gold-silver ratio has already fallen to 51:1, with silver’s upward elasticity far exceeding that of gold, reflecting capital chasing high-elasticity physical assets.

On the other hand, industrial demand provides a stronger structural support. The annual demand for silver in the photovoltaic industry has surpassed 5,000 tons, accounting for one-sixth of global annual silver production. Silver paste, used as raw material in photovoltaic cells, is the “circulatory system” of solar panels, capable of improving energy conversion efficiency and output performance. Coupled with rigid demand in AI data centers, chip packaging, and other fields, the global silver supply shortage has reached 200 million ounces.

This means silver is no longer just a safe-haven asset but has become a critical bottleneck in global energy transition and industrial upgrading.

Supply pressure accelerates industry chain reactions

Under the dual pressures of high silver prices and tight supply, the industry chain has begun to make adjustments. Many listed companies have started exploring “de-silvering” and “less silver” technologies, with related capacity building scheduled to begin on a large scale by 2026.

This is not a passive choice but a proactive response. When silver prices remain high and profit margins are squeezed, seeking alternatives becomes inevitable. This technological substitution race is essentially a collective breakout of the global industry chain in the face of silver supply bottlenecks.

Less Silver Technology: An Inevitable Choice for the Industry Chain

Why are companies accelerating the adoption of less silver? A few key figures tell the story.

As raw material costs rise rapidly, companies face two options: raise prices to pass on costs or improve processes to reduce usage. However, in fiercely competitive sectors like photovoltaics and electronics, raising prices often means losing market share. Therefore, technological innovation becomes a more practical solution.

Key directions for advancing less silver technology include:

• Optimizing silver paste formulations to lower silver content per unit while maintaining conductivity
• Developing alternative conductive materials, exploring applications of copper, nickel, and other metals
• Improving process flows to enhance silver utilization efficiency and recovery rates
• Developing new battery and chip architectures to fundamentally reduce reliance on silver

Winners and Losers in This Race

The large-scale deployment of less silver technology will reshape the cost structure of the entire industry.

For companies, those who first break through in less silver technology will gain a competitive advantage in costs. This explains why many listed companies are accelerating their layout—this is a technological race that concerns future competitiveness.

For the industry chain, advancing less silver technology may slow the growth of industrial demand for silver. This could, in turn, influence the long-term trend of silver prices. However, during this process, costs in industries like photovoltaics and chips are expected to gradually ease.

For investors, this is a signal worth observing. It reflects that the global industry chain is actively responding to supply bottlenecks rather than passively enduring them. This resilience itself demonstrates the long-term health of the industry.

Summary

A 30% surge in silver prices is not an isolated event but the result of multiple factors resonating—global risk aversion, energy transition, and industrial upgrading. The acceleration of less silver technology by enterprises reflects the industry chain’s proactive adaptation to supply constraints. This material substitution race is both a response to silver shortages and an inevitable process of industry optimization and upgrading. The key is that whoever can more quickly break through in less silver technology will seize the advantage in the next round of competition.