On October 21, 2025, Urumqi, Xinjiang - China's leading silicon-based new materials company, Hesheng Silicon Industry Co., Ltd. (hereinafter referred to as "Hesheng Silicon Industry"), recently announced that its annual production of 100000 tons of functional silicone oil project in Xinjiang West Hesheng Silicon Industry Co., Ltd. has completed environmental impact assessment and officially entered the construction phase. The project plans to construct one 200000 ton siloxane production line and three downstream deep processing lines, among which ethyl silicone oil is one of the core products, with an expected annual production capacity of 30000 tons, which will significantly enhance the domestic high-end silicone oil supply capacity.


Project highlight: Integration of the entire industry chain to create a silicon-based material cluster
The total investment of Hesheng Silicon Industry project exceeds 5 billion yuan, covering the entire industry chain from silicon mining to terminal product manufacturing. The project adopts internationally advanced continuous production technology, and through precise control of the ring opening polymerization process of siloxane, the purity of ethyl silicone oil products reaches over 99.9%, with a volatile substance content of less than 0.1%, meeting the strict requirements for material purity in high-end fields such as semiconductors and photovoltaics. In addition, the project is equipped with a waste gas recovery device to achieve the recycling of siloxane monomers, reducing energy consumption per ton of product by 20% compared to traditional processes.


Market demand: New energy and electronics industries drive growth
Ethyl silicone oil has become a key raw material for new energy battery separator coatings and 5G communication equipment heat dissipation materials due to its excellent insulation, temperature resistance, and chemical inertness. According to market research institutions' predictions, the production of new energy vehicles in China will exceed 12 million units by 2025, driving a 40% increase in demand for silicon-based coating materials for batteries; At the same time, the acceleration of 5G base station construction will expand the market size of thermal conductive silicone grease to 8 billion yuan. The layout of Hesheng Silicon Industry aims to seize the high-end market share. Its products have been certified by multiple leading enterprises and are expected to achieve an annual sales revenue of 2.5 billion yuan after being put into operation in 2026.


Industry impact: Increased concentration, forcing technological upgrades
At present, the capacity utilization rate of China's silicone oil industry is about 75%, but high-end products still rely on imports. After the Hesheng Silicon Industry project is put into operation, the annual production capacity of ethyl silicone oil in China will increase by 15%, and the industry CR5 (market share of the top five enterprises) is expected to increase from 65% to 72%. Analysts point out that the economies of scale of large enterprises will force small and medium-sized enterprises to accelerate technological transformation, otherwise they may face elimination. For example, regional enterprises such as Hubei Shishun Biotechnology Co., Ltd. have begun to collaborate with universities to develop ultra-low temperature resistant ethyl silicone oil, attempting to break through through through differentiated competition.


Conclusion
From the technological breakthroughs of Yunnan Energy Investment to the capacity expansion of Hesheng Silicon Industry, China's ethyl silicone oil industry is undergoing a transformation from "following" to "running in parallel". With the rapid development of industries such as new energy and electronic information, the market demand for high-end silicone oil will continue to be released, and technological innovation and industrial chain integration capabilities will become the core elements of enterprise competition.