（July 02, 2026）In 2026, the silicone industry will enter a critical cycle of restructuring supply and demand and increasing the volume of high-end products. The epoxy silicone oil market, which has both the weathering properties of siloxane and epoxy reactive groups, will usher in a window for rapid growth. The latest data from industry research institutions show that in the first half of 2026, total domestic epoxy silicone oil production increased by 13.2% year-on-year, and the growth rate of high-end electronic grade and new energy-specific epoxy silicone oil exceeded 30%. Domestic products have gradually broken the long-term monopoly of overseas brands.
As a core category of modified silicone, epoxy silicone oil has polydimethylsiloxane as its main molecular chain and epoxy active groups on the ends. It not only retains the advantages of silicone oil such as low surface tension, high and low temperature resistance, insulation and moisture resistance, but also can undergo cross-linking reactions with epoxy resins and amine curing agents. It perfectly solves the poor compatibility and easy precipitation defects of ordinary silicone oil and resin. It is an indispensable key additive for paint leveling, electronic packaging, wind power composite materials, and textile functional finishing.
1. Supply side: Leading companies are expanding production and focusing on high-end brands, and green processes are fully implemented.
The domestic industrial layout continues to transform towards refinement and specialization. Zhejiang Weifeng New Materials' 35,000-ton high-end silicone expansion project completed equipment commissioning in the second quarter of 2026. The supporting 3,000-ton/year high-purity epoxy silicone oil production line was officially put into production. It focuses on low-ion epoxy silicone oil for semiconductor packaging and photovoltaic double glass glue. The metal ion residue in the product is controlled within 0.1ppb, meeting the EU REACH and the high cleanliness standards for electronic components of the Quzhou Municipal Government.
Leading companies such as Blue Star, Xin'an Chemical, and Chenguang New Materials have simultaneously optimized synthesis routes, eliminated traditional high-polluting platinum catalytic processes, and promoted metal-free green catalytic technology. The grafting rate of epoxy groups has steadily increased to 10%–12%, and the molecular weight distribution is narrow and controllable. The gross profit margin of high-end products remains above 55%, which is nearly 20 percentage points higher than that of general-purpose textile-grade epoxy silicone oil.
The overall supply side shows a situation of low-end saturation and high-end shortage. The industry strictly controls low-level duplication of construction. There will be no new general-purpose epoxy silicone oil production capacity in 2026. All new production lines will be targeted at new energy and semiconductor tracks, effectively easing dependence on the import of high-end materials. The price of upstream silicone DMC raw materials has stabilized at 13,800-14,300 yuan/ton, providing cost support for the stable production of epoxy silicone oil.
2. Demand side: New energy and AI electronics become core growth engines
From the perspective of downstream consumption structure, the demand structure of epoxy silicone oil will undergo significant changes in 2026. The proportion of traditional textile auxiliaries continues to decline, and demand in the high-end manufacturing field is rapidly expanding:
I.Semiconductor and AI computing power packaging (accounting for 39.7%)
AI server and GPU chip encapsulation epoxy resins add a large amount of epoxy silicone oil as a toughening and leveling additive, which can increase heat dissipation efficiency by 25%, reduce curing internal stress, and prevent chip cracking during hot and cold cycles. In the first half of 2026, investment in domestic computing power infrastructure increased by 42% year-on-year, driving the purchase of electronic-grade epoxy silicone oil to increase by 36% year-on-year. Previously, more than 60% of the market share in this field was occupied by Dow and Wacker. Currently, domestic leading companies have entered the domestic leading packaging and testing manufacturer supply chain certification system.
II.Photovoltaic and wind power new energy composite materials (accounting for 28.4%)
Epoxy silicone oil is used as an epoxy resin release agent for wind turbine blades and a modifier for photovoltaic BIPV sealants. After modification, the fatigue resistance of the blades is increased by 25%, and the salt spray resistance life of offshore wind turbines is extended to 25 years. The outdoor power generation attenuation of photovoltaic modules is controlled within 8% in 5 years, which is significantly better than traditional additive solutions. In 2026, domestic offshore wind power and distributed photovoltaic installations will accelerate, and the demand for related epoxy silicone oil will grow at an annual rate of over 28%.
III.Industrial coatings, high-end textiles (total 25%)
Epoxy silicone oil is used in automobile original paints and anti-corrosion coatings to improve the flatness of the paint film and resist cratering; low-yellowing epoxy silicone oil is used to replace amino silicone oil in functional textile fabrics, which meets the EU green textile standards for export. Export orders increased by 11.5% year-on-year.
Institutions predict that the domestic epoxy silicone oil market will exceed 5.4 billion yuan in 2026, and the global market size will reach 2.02 billion US dollars; by 2030, the global market size will climb to 2.98 billion US dollars, and China's market consumption will increase to 42%, becoming the world's largest epoxy silicone oil consumer market.
3. Industry trends: three major development lines are clear
I.High purity specialization
Downstream electronics and new energy customers have continued to increase their requirements for customized epoxy silicone oil purity, ion content, and epoxy equivalent. Single general brands have been gradually phased out. Enterprises have turned to customized research and development and developed exclusive modified brands for battery packaging, copper-clad laminates, and wind turbine blades. Product premiums have increased by 30%–50%.
II.Green and low-carbon production
The new version of the "Organic Silicone Industrial Pollutant Emission Standard" will be fully implemented in 2026. Wastewater and waste gas recovery indicators are tightened. Heavy metal-free catalysis and biosynthesis processes have become the core of corporate technological transformation. Bio-based epoxy silicone oil has gradually achieved small-batch mass production, adapting to the dual-carbon policy and overseas green trade barrier requirements.
III.Integration of the entire industry chain
Leading silicon companies are targeting metal silicon and DMC raw materials upwards, extending downwards to deep processing of epoxy silicone oil and terminal compound materials, and compressing comprehensive costs by 8%–12% through integrated production. Small and medium-sized refined companies are focusing on differentiated competition in segmented tracks, and industry concentration continues to increase. It is expected that the industry CR5 will exceed 65% in 2030.
4. Industry Outlook
Industry experts said that as domestic high-end epoxy resins and electronic packaging materials continue to replace imports, coupled with the long-term prosperity of new energy vehicles, AI computing power, and wind and solar energy storage, the high growth cycle of epoxy silicone oil will be maintained until at least 2030. In the short term, the peak stocking season of the photovoltaic and electronic manufacturing industries in the third quarter will drive further orders for epoxy silicone oil; in the medium and long term, the core competitive focus of enterprises will be on high-end synthesis technology, downstream joint development services and overseas market export expansion. Leading enterprises with high-purity product mass production capabilities and integrated layout will continue to benefit from industry dividends.
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