(August 24, 2026) There are positive signs in the domestic specialty silicone industry. With the rapid development of industries such as semiconductor immersion cooling systems, power devices for new energy vehicles, photovoltaics, and aerospace, phenylsilicone, as a key specialty silicone material that can withstand high and low temperatures, high insulation, radiation exposure, and high refractive index, continues to see increasing demand. Domestic high-end products are rapidly replacing imported ones, and the entire industry chain is moving towards higher purity, greener processes, and customized solutions.

Phenylsilicone has a modified molecular structure through phenyl modification. Compared to ordinary methylsilicone, it possesses better thermal stability, radiation resistance, and optical properties. It can operate effectively within a wide temperature range of –70°C to 300°C. It is widely used in electronic packaging, liquid cooling media for AI computing power, high-temperature lubrication, LED optical encapsulation, high-end cosmetics, coating additives, and aerospace sealing. It is an essential functional chemical material for high-end manufacturing.

According to statistics from industry institutions, the global phenylsilicone market will maintain steady growth in 2026, with an expected annual compound growth rate of around 6.8%. By 2028, the global market size is expected to exceed $1.2 billion. The Asia-Pacific region is the main consumer market, accounting for over 45% of the global consumption. In the domestic market, driven by the development of new energy and computing infrastructure sectors, the domestic phenylsilicone market size increased steadily in 2026. The demand in the electronic semiconductors and data center liquid cooling sectors is particularly high; the annual consumption in these areas is expected to reach 64,000 tons, an increase of over 10% compared to previous years.

For a long time, the market for phenylsilicone with high phenyl content and ultra-high purity for electronic applications was dominated by foreign chemical companies. Key technologies such as high-purity synthesis, metal ion control, and narrow molecular weight distribution posed significant challenges. Most domestic companies focused on mid- to low-end products, while high-end products relied on imports. Long lead times and high procurement costs hindered the development of domestic downstream enterprises.

In recent years, significant progress has been made in collaboration between academia, industry, and research institutions. Many leading silicone companies have worked together with universities to achieve technological breakthroughs. Production lines capable of producing ten-thousand-ton quantities of high-purity phenylsilicone with high phenyl content have been put into operation. These products meet international standards in terms of thermal weight loss, metal ion impurities, batch stability, and refractive index control. Some of their properties even exceed those of international products, breaking the long-standing monopoly by foreign companies and filling the gaps in key materials for aerospace, semiconductor packaging, and nuclear power equipment in China.

With the establishment of domestic production lines, the proportion of high-end phenylsilicone produced domestically has increased rapidly. It is expected that by the end of 2026, the domestic production of high-end phenylsilicone will exceed 70%. Downstream companies involved in new energy vehicle IGBT packaging, GPU immersion cooling, photovoltaic inverter sealing, and LED optical encapsulation are gradually switching to domestic supply chains, which helps reduce supply chain risks and procurement costs.

In terms of product structure, there is significant differentiation in the market. The market for low-phenyl general-purpose phenylsilicone is highly competitive. High-phenyl (45%-60%) products, low-metal-ion content, and low-ring-body-content high-end products offer higher prices and represent the main area of competition among companies. At the same time, green manufacturing has become an important direction for the industry. Solvent-free synthesis, closed-loop solvent recycling, and waste product recycling techniques are becoming more common. Products with low VOC and environmentally friendly properties are gaining more market share. Some companies are also developing bi-based phenylsilicone, further reducing the carbon footprint of their products and meeting international environmental certification requirements.

There are many new growth opportunities in downstream applications. The development of AI computing power has led to a surge in demand for immersion cooling systems. Phenylsilicone, due to its insulating properties, low volatility, and chemical stability, is an ideal medium for high-density server immersion cooling. The upgrade of high-voltage platforms in new energy vehicles has led to increased use of phenyl-modified silicones that can withstand high temperatures and age. The evolution of N-type solar cells and Mini-LED technologies has created higher demands for customized properties of silicone. In the field of high-end cosmetics and skincare, low-ring-body, high-purity phenylsilicone serves as a ingredient that improves skin feel, and its demand is steadily increasing.

Industry analysts say that China’s silicone industry is transitioning from basic bulk products to high-value specialty materials. Phenylsilicone is one of the key materials supported by the “Advanced Silicone Functional Materials Industrialization Action Plan.” Policies and market forces are driving the industry forward. In the future, competition will not be limited to simple production capacity. High-purity synthesis technology, customized molecular design capabilities, batch consistency, comprehensive testing capabilities, and overseas compliance certifications will become the core competitiveness of companies. In the short term, the supply of phenylchlorosilane monomers and cost fluctuations remain important factors. In the long term, continued domestic substitution, along with the expansion of new sectors such as new energy, computing power, and aerospace, will ensure the continued growth of the phenylsilicone industry.