The silver market performed exceptionally well in 2025, with prices surging significantly, even outpacing the gains of some tech giants and major stock indices. The performance of the iShares Silver Trust (SLV), which tracks silver prices, clearly reflects this strong momentum. After such a notable rise, market attention has inevitably turned to whether this upward trend can be sustained. Analysis suggests that three interconnected technological trends are continuously and profoundly driving the growth of industrial demand for silver, which is likely to provide robust support for silver prices in 2026.
Understanding the unique supply structure of silver is key to assessing its price potential. Silver is primarily obtained as a byproduct of mining base metals such as copper, lead, and zinc, rather than from silver-focused mines. This supply model means its production cannot flexibly respond to short-term price signals like ordinary commodities. Even in 2024, when prices began to rise significantly, global silver production increased by a mere 1%. This relatively rigid supply, combined with continuously growing demand, forms the fundamental backdrop of the market.
The global push for energy transition is driving record-breaking installations of solar photovoltaic (PV) capacity. In the first half of 2025, global new PV installations reached 380 gigawatts, a substantial increase compared to the same period last year. As silver is the most conductive metal in the periodic table, it is a critical material for the front electrodes of solar panels. On average, each standard solar panel contains about 0.64 ounces of silver. In the first half of 2025 alone, the global PV industry likely consumed approximately 448 million ounces of silver. Despite policy uncertainties in some countries, the global expansion trend remains clear. China leads the world in installations, while the European Union and the United States are promoting deployment through policies like building-integrated solar, and countries such as Saudi Arabia have ambitious renewable energy plans. This global green energy race is the most solid foundation for silver demand.
The electrification of the transportation sector is another significant driver of silver demand. Due to their more complex power electronics, battery management systems, and charging systems, electric vehicles (EVs) use significantly more silver on average than traditional internal combustion engine vehicles. According to data from the Silver Institute, a battery electric vehicle uses about 1.5 ounces of silver, while a traditional gasoline-powered vehicle typically uses less than 1 ounce. Although consumer subsidy policies have been adjusted in some markets, global EV sales maintained year-over-year growth in the first ten months of 2025. Industry forecasts suggest that by 2026, the global EV fleet will see significant growth, meaning tens of millions of new vehicles annually will continue to drive substantial incremental demand for silver.
While the rise of artificial intelligence does not directly consume vast amounts of silver, it indirectly and powerfully drives demand through two pathways. First, silver is an important material in semiconductor chip manufacturing and packaging, and related demand is expected to grow steadily. More importantly, AI computing and the data centers that support it are massive energy consumers, forcing countries to seek stable and sufficient clean energy to ensure energy security. This, in turn, further accelerates investment in silver-intensive energy sources such as solar power. Additionally, nuclear energy, which serves as a baseload power source, is also a consumer of silver, with each nuclear reactor containing a considerable amount of silver on average. The renewed global focus on and deployment of nuclear power will add another boost to industrial demand for silver.
