I. Market Recovery: Demand growth and the emergence of industry turning points
The signals of industry recovery are clear
In the first half of 2025, the silicone industry was under overall pressure due to fluctuations in industrial silicon prices and weak demand for polysilicon. However, in the second half of the year, with the continuous release of demand in emerging fields such as new energy and electronic appliances, the industry's operating rate has remained stable at over 70%, and the inventory pressure has gradually eased. Cicc predicts that silicone may be the first to recover and become the most promising sub-sector among silicon-based materials.
The demand structure has been continuously optimized
In the field of new energy, photovoltaic module encapsulation adhesives need to meet extreme temperature differences ranging from -40℃ to 85℃. The thermal conductivity requirement for sealants in new energy vehicle battery packs has been raised to 1.5W/m·K, driving a sharp increase in the demand for functional silicone rubber and silicone oil.
In the field of electronics and electrical appliances, the requirements for high-temperature resistance and insulation performance in 5G base station heat dissipation materials, semiconductor packaging adhesives, etc. have increased, driving the expansion of the high-end silicone rubber and silicone resin market.
In the medical and health sector, the application of biocompatible materials in implantable devices and drug sustained-release systems is deepening, presenting long-term growth opportunities for medical-grade silicone enterprises.
Ii. High-end Development: Technological Barriers and Accelerated import substitution
The proportion of high-end products has increased
With the advancement of the "dual carbon" goals, the industry entry threshold has significantly increased, and the elimination of backward production capacity is accelerating. It is expected that by 2025, the proportion of high-end products (such as semiconductor packaging adhesives and medical silicone) will increase from the current 30% to 45%, driving up the industry's gross profit margin by 5 to 8 percentage points. For instance, the low-molecular-weight polydimethylsiloxane (PDMS) developed by Hesheng Silicon Industry has been applied in semiconductor packaging, breaking the foreign technological monopoly.
Functional materials have become the main driver of growth
Thermal grease: The heat dissipation demands of 5G base stations have driven products with a thermal conductivity of ≥3W/m·K to become mainstream.
Optical-grade silicone: Applied in Mini LED packaging, with a light transmittance requirement of ≥95% and an adjustable refractive index range expanded to 1.4-1.6.
Liquid silicone rubber (LSR) : Due to its chemical stability, non-toxicity and low sensitivity, its demand in the fields of medical aesthetics and wearable devices is growing rapidly.
Iii. Greening: Environmental Protection Regulations and Circular Economy Drive Industrial Upgrading
Green transformation at the production end
The enterprise has enhanced the efficiency of monomer synthesis by improving the reaction process, and the comprehensive utilization rate of by-products has approached the international leading level. For instance, the research and development of bio-based silicone rubber has entered the practical stage. A certain enterprise has completely broken away from its reliance on petroleum raw materials through the technology of producing highly active silane from rice husks.
The industrial Internet optimizes production processes and reduces unit energy consumption. After a certain enterprise introduced AI algorithms, the energy consumption for monomer synthesis decreased by 12% and the production efficiency increased by 18%.
Promotion of the circular economy model
The target for the mandatory recycling rate of silicone rubber in building demolition is clear. Guangzhou has piloted a "trade-in for new" recycling system, and the performance of recycled silicone rubber has reached the level of virgin material.
Blockchain technology enables raw material traceability and real-time inventory management, reducing operational risks. For instance, a certain enterprise has increased the product yield rate from 92% to 98% through an intelligent control system.
Iv. Intelligence: Digital Transformation Reshapes the competitive landscape
The construction of smart factories is accelerating
Big data and artificial intelligence technologies enable dynamic optimization of production parameters. For instance, the "Industry Brain" in Yongxiu County, Jiangxi Province, integrates industrial operating systems and industrial apps to collect and analyze production data in real time, helping enterprises optimize equipment scheduling and predict market demand.
The digital platform offers customized solutions. The "Silicone Materials Cloud Platform" launched by a certain enterprise integrates R&D, production and logistics data, shortening the customer response cycle.
The efficiency of supply chain collaboration has been enhanced
Blockchain technology enables raw material traceability and real-time inventory management, reducing operational risks.
The industrial Internet optimizes production processes and reduces unit energy consumption. For instance, a certain enterprise has increased the product yield rate from 92% to 98% through an intelligent control system.
V. Investment Strategy: Focus on core capabilities and emerging scenarios
Leading enterprises: Focus on those that possess the ability to integrate the entire industrial chain, technological iteration capabilities, and international layout. For instance, enterprises that have already established production bases in Vietnam are radiating the infrastructure recovery demands of ASEAN.
In the new energy sector, the demand for materials such as photovoltaic encapsulation adhesives and lithium battery adhesives continues to grow. It is recommended to pay attention to suppliers that cooperate with leading battery manufacturers.
Medical and health upgrade: The application of biocompatible materials in implantable devices and drug sustained-release systems is deepening, and medical-grade silicone enterprises have long-term growth potential.
