Capacity Expansion: Top Enterprises Accelerate Layout, Yangtze River Delta Becomes Core Production Area
Since the beginning of 2026, China's ethyl silicone oil industry has ushered in a new wave of capacity expansion. On February 13th, Hesheng Silicon Industry released an environmental impact assessment announcement for the 100000 ton functional silicone oil project of Xinjiang Western Hesheng Silicon Industry Co., Ltd. It plans to build one 200000 ton silicone oil production line and three downstream deep processing product production lines, including high viscosity ethyl silicone oil production capacity. If the project is successfully put into operation, it will enable Hesheng Silicon Industry to establish a new northwest production capacity base in addition to the three traditional production areas of the Yangtze River Delta, Bohai Rim, and Chengdu Chongqing, further consolidating its market position.


According to statistics from the China Chemical Industry Information Center, as of the end of 2025, the nominal production capacity of ethyl silicone oil in China has reached 12500 tons per year, with an actual output of 10150 tons, a year-on-year increase of 11.3%. Zhejiang Hesheng Silicon Industry, Shandong Dongyue Group, and Jiangsu Hongda New Materials, the three leading enterprises, together occupy 61.4% of the market share, forming a "three legged" pattern. Among them, Hesheng Silicon Industry, with its full industry chain advantages, continues to make efforts in the fields of high value-added products such as electronics and cosmetics, and the proportion of high-end products will increase to 45% by 2025.


Application expansion: New energy and semiconductors become new growth poles
The application field of ethyl silicone oil is accelerating its penetration from traditional industries to high-end manufacturing. In the field of new energy, leading companies such as CATL and Longi Green Energy are promoting the large-scale application of ethyl silicone oil in thermal management of power batteries and packaging of photovoltaic modules. In 2025, the demand for ethyl silicone oil in the new energy industry will reach 2242 tons, accounting for 22.1%, and is expected to exceed 1200 tons by 2026. Among them, the demand for high thermal conductivity and low-temperature resistant ethyl silicone oil in the field of power battery thermal management has surged. Some companies have developed products with a wide temperature range of -50 ℃ to+250 ℃ to meet the needs of new energy vehicles in extreme environments.


The semiconductor industry is another major growth engine. With the iteration of chip packaging technology below 3nm, ethyl silicone oil has become a key component of advanced packaging materials due to its low volatility and high insulation properties. By 2025, the demand in the semiconductor industry will reach 3340 tons, accounting for 38.2%, a year-on-year increase of 15%. Huawei, SMIC and other companies have incorporated domestically produced ethyl silicone oil into their supply chains to promote the process of import substitution.


Price fluctuations: resonance between cost pressure and supply-demand imbalance
In March 2026, the global silicone market will usher in a new wave of price increases. Dow announced a price increase of 5% -15% for its core products such as dimethyl silicone oil and vinyl silicone oil starting from March 27th, marking its third price adjustment within six months. Wanhua Chemical, Zhejiang Longsheng and other companies followed suit and raised product prices one after another. The price increase this time is mainly affected by the rising cost of raw materials, increased energy expenditure, and the transmission of supply chain pressure. According to data from Bezos Consulting, the global market size of ethyl hydrogen silicone oil will reach 1.092 billion yuan in 2024, and is expected to increase to 1.865 billion yuan by 2030, with an average annual compound growth rate of 12.3%. Cost pressure may continue to exist.


From the perspective of supply and demand, the ethyl silicone oil market presents the characteristics of "loose total quantity and scarce high-end". The capacity utilization rate in 2025 is about 73%, but the qualification rate of electronic grade products is only 58.7%, which restricts the process of domestic substitution. Taking high-end cosmetic grade ethyl silicone oil as an example, its metal ion content needs to be less than 2 ppm, and its molecular weight distribution (Đ) should be controlled between 1.8-2.0. Currently, only a few companies can provide stable supply. The imbalance between supply and demand has led to a continuous rise in the prices of high-end products. By 2025, the average price of electronic grade ethyl silicone oil will reach 345000 yuan/ton, and cosmetic grade will reach 312000 yuan/ton, with a premium of over 30% compared to ordinary industrial grade products.


Technological breakthrough: Green and intelligent leading industrial upgrading
Faced with the dual pressures of cost and environmental protection, ethyl silicone oil companies are accelerating technological iteration. In terms of greening, bio based ethyl silicone oil has become a research and development hotspot. By 2025, China has built three pilot lines for bio based silicone oil and plans to achieve commercial production by 2027. The M-20 series low molecular weight ethyl hydrogenated silicone oil developed by Sanno Chemical has a thermal stability of -50 ℃ to+250 ℃ and a VOC content of less than 0.3%. It has passed international authoritative certification and achieved import substitution in the field of new energy vehicle battery packaging.


Intelligent production is another major trend. Strong Chemical has upgraded the automation of the double sealed end vinyl silicone oil production line, increasing the daily output of a single line to 15 tons, covering a viscosity range of 18-100000 mPa · s, with a volatile matter content (150 ℃, 3 hours) of less than 0.5%, and a metal ion content of less than 20 ppm, reaching the international advanced level. In addition, centrifugal extraction technology is increasingly widely used in the production of vinyl silicone oil. By optimizing the extraction conditions, residual siloxane rings after polymerization can be effectively removed, and the volatile content of the product can be controlled below 0.1%, meeting the demand for high-end electronic packaging materials.


Future outlook: Parallel high-end and globalization
Looking ahead to 2026, the Chinese ethyl silicone oil market is expected to continue its growth trend. Based on the ARIMA-LSTM fusion model, it is predicted that the market demand will reach 10280 ± 430 tons in 2026, with a compound annual growth rate of around 12.5%. The main driving force for growth comes from the iteration of advanced semiconductor packaging technology, the upgrading of thermal management for new energy vehicles, and the formula innovation brought about by the stricter regulation of high-end cosmetic efficacy claims.


In terms of global layout, Chinese ethyl silicone oil enterprises are transforming from "scale output" to "technology leadership". Enterprises such as Xinyuan Chemical and Nak Group have accelerated the export of technical standards by establishing research and development centers in Southeast Asia and Europe. In 2025, the export volume of ethyl hydrogen silicone oil from China will increase by 22% year-on-year, mainly sold to high-end manufacturing powers such as South Korea, Japan, and Germany. With the deepening of the RCEP agreement and the enhancement of regional industrial chain synergy, China is expected to occupy a higher position in the global organic silicon value chain.