The silver price has recently recovered significantly and is again trading above $63 per ounce. This rally was primarily driven by strong investment demand. However, according to a new report by the Silver Institute, silver is likely to be supported in the long term not only by investors, but increasingly by industry. The study, prepared by Oxford Economics, paints a picture of silver as a key commodity for global electrification until 2030.
The focus here is on silver as an industrial metal: its special electrical and thermal conductivity makes the raw material a central component in the energy transition, electromobility and advancing digitization – from solar modules to electric vehicles (EVs) to data centers and applications in the field of artificial intelligence (AI).
Silver: Investment boom meets growing industrial demand
While in the short term investment demand was the most important price driver in the silver market, the industrial use of silver is increasingly moving into the foreground. The Silver Institute sees this as a structural tailwind that extends beyond the current cycle.
Silver benefits from several directions at once: on the one hand, demand for bars, coins and exchange-traded silver products remains high, and on the other hand, large future-oriented industries are increasing demand. Oxford Economics assumes that industrial demand will continue to increase until 2030, thus laying a stable foundation under the silver market.
Silver is not only a precious metal, but an indispensable functional material. Especially in applications where high conductivity and reliability are important, the raw material is difficult to replace. This makes silver a key substance in many components of the energy transition and digital infrastructure.
Solar energy as the biggest driver of silver demand
According to the Silver Institute, the solar industry continues to make the largest contribution to industrial silver demand. Photovoltaics (PV) has developed into a dominant area of application for silver in the past ten years. In 2014, approximately 11% of global silver demand was attributable to PV applications – now it is around 29%.
Technological advances and “Thrifting” – i.e. the targeted reduction of the silver content per cell – have led to modern solar modules requiring less silver per watt of power. However, analysts believe that this effect will be significantly overcompensated by the massive expansion of photovoltaics.
Political objectives support this development: For example, the European Union is aiming for an installed solar capacity of at least 700 gigawatts by 2030. In conjunction with expansion programs in Asia and North America, this creates a long-term framework in which silver will be in greater demand in absolute figures, even if the silver content per PV module continues to fall.
Electric vehicles: Silver consumption per car significantly higher
In addition to solar energy, electromobility is developing into the second most important growth driver for silver. The Silver Institute expects global silver demand from the automotive industry to increase between 2025 and 2031 at an average annual growth rate of 3.4%.
The key point: Electric vehicles require significantly more silver than classic combustion engines. Silver can be found in battery management systems, power electronics, charging infrastructure and numerous electrical contacts, among other things. According to the study, electric vehicles – especially battery electric vehicles (BEVs) – consume an average of 67 to 79% more silver than models with combustion engines. Accordingly, around 25 to 50 grams of silver are used per vehicle.
With the global ramp-up of electromobility, the expansion of charging and fast-charging infrastructure and the growing proportion of electronics in modern vehicles, the silver demand of the automotive industry is thus continuously increasing. At the same time, silver accounts for only a small proportion of the total cost of a vehicle, which can initially cushion price increases without directly impacting manufacturer margins.
Data centers, AI and the digital expansion support silver in the long term
The digital infrastructure is also coming into focus as a further growth driver for silver. Data centers, cloud architectures and AI applications require ever higher computing power – and thus more servers, network technology and power supply solutions in which silver is installed.
The Silver Institute report quantifies the total IT power capacity worldwide as an increase from 0.93 gigawatts in 2000 to almost 50 gigawatts in 2025. This corresponds to an increase by a factor of 53 or around 5,252%. Even if exact data on the “silver load” of individual components are not available in all cases, the analysts see a clear connection: More computing power means more hardware – and thus a higher demand for silver in contacts, conductor tracks and high-performance connectors.
With the further spread of AI applications – for example in media production, design, simulation or industrial automation – the need for data centers and thus the number of installed systems is likely to increase further. Silver indirectly benefits from its use in the electrical infrastructure, in high-frequency components and in power distribution.
Silver: Industrial base as the foundation of the long-term trend
The Silver Institute concludes that the industrial metal property of silver gives the market a stable foundation. Short-term fluctuations resulting from speculative investment demand meet a structurally growing use in key industries of the energy transition and digitization.
It is worth noting that silver accounts for only a small proportion of the cost of the end product in many applications – whether in PV modules, vehicles or servers. This leaves room for price increases before they are noticeably reflected in margins or end prices.
For the silver market, this means: In addition to the dominant role of investment flows, a broadly supported industrial demand is establishing itself, which is helping to shape the long-term development of the precious metal. Silver thus remains not only the “little brother of gold”, but also a strategically important industrial metal at the center of the global electrification and digitization wave.
