On October 27, 2025, Shanghai - Affected by geopolitical conflicts, inflationary pressures, and the "anti involution" policy, China's silicone industry is undergoing a deep adjustment. Although the industry's net profit margin continues to decline in the first half of 2025, the downstream deep processing field and high-end application market show strong growth potential.


Export growth slows down, Indian market becomes a new blue ocean
According to customs data, the export growth rate of organic silicon from January to July 2025 is only 2%, significantly slowing down from 34% in 2024. Analysis shows that the growth of the South Korean and American markets is weak, but the Indian market has become a new growth point in the industry due to the surge in demand for infrastructure construction. It is expected that after 2027, with the withdrawal of production capacity by international giants such as Dow Chemical, China's organic silicon exports will usher in a new growth cycle.


Industrial silicon prices hit bottom and rebounded, highlighting the synergistic effect of the industrial chain
Although industrial silicon production in August 2025 is close to the same period in 2024, downstream demand for polycrystalline silicon and organic silicon remains flat, leading to price fluctuations. However, futures data shows that industrial silicon prices have started to rebound since hitting bottom in early June. Leading enterprises such as Hesheng Silicon Industry have increased the proportion of self-produced and self used industrial silicon to 60% through full industry chain layout, relying on self owned quartz sand ore and fluidized bed reactor technology, with a cost 15% lower than the industry average.


Breakthrough in silicon carbide materials, accelerating domestic substitution in the semiconductor field
In the semiconductor field, organic silicon derived materials have become the key to domestic substitution. Hesheng Silicon Industry's 6-inch silicon carbide substrate yield rate has reached 95%, 8-inch products have been produced in small batches, and 12 inch research and development has been smoothly promoted. Its ultra-high purity silicon carbide ceramic powder can meet the heat dissipation requirements of 5G base station, and electronic grade organic silicon gel is used in the field of power battery sealing. According to a research report by Shenwan Hongyuan, enterprises with scale advantages and downstream deep processing capabilities will benefit first in the industry's bottom reversal.


Cross border integration of intelligent materials, opening up new growth poles
The integration of organic silicon with artificial intelligence and robotics technology has become a new trend. The "Organic Silicon+AI" Innovation Laboratory of Zhongyan Puhua has incubated 17 patents, among which the shape memory silicone rubber artificial muscle technology can respond to temperature changes within 0.1 seconds, providing power support for exoskeleton robots. In addition, the application growth of medical grade silicone in wearable devices is significant, and it is expected that the market size will exceed 20 billion yuan by 2028.


Corporate News


Hesheng Silicon Industry: In the first half of the year, the R&D investment was 179 million yuan, the industrialization of amino silicone oil and organic silicon lotion was realized, and the proportion of silicon carbide business contribution revenue increased to 12%.
Dongyue Group: With special support from the National Manufacturing Fund, the localization project of etching solution has entered the pilot stage, breaking the foreign technology monopoly.
Xin'an Corporation: The Yicheng base project is expected to be completed by 2026, with a focus on photovoltaic adhesive and electronic grade silicone oil. Orders have already covered the top ten solar energy companies worldwide.
Expert opinions
Tao Yunfeng, Deputy Chief Engineer of China Fluorosilicon Organic Materials Industry Association, said, "The industry has shifted from 'cost competition' to 'scenario definition rights' competition. Enterprises need to seize the opportunity in trillion dollar tracks such as medical and health, intelligent materials, etc. through technological innovation and industrial chain integration