(September 23, 2026) There are structural changes in the domestic silicone industry chain. Vinyl silicone oil, which serves as a core raw material for grafted liquid silicone rubber, thermal conductive gels, and electronic encapsulation adhesives, is being increasingly replaced by domestic products in high-end applications. Orders in sectors such as new energy vehicles, semiconductor packaging, and photovoltaics are increasing steadily, driving the industry toward higher purity, lower volatility, and customized solutions.

Vinyl silicone oil is a polysiloxane with vinyl functional groups in its molecular chain. It appears as a colorless and transparent liquid. Through the action of active vinyl groups under platinum catalysts, it can cross-link without any by-products. It has properties such as resistance to high and low temperatures, insulation, and aging resistance. It is a key ingredient in liquid silicone rubber (LSR) and high-temperature vulcanized silicone rubber. It is widely used in electronic thermal management, battery encapsulation, semiconductor packaging, and medical silicone products. Products are divided into general-purpose and electronic-grade types. Electronic-grade high-purity vinyl silicone oil requires strict control over metal ions, volatile components, and vinyl content. It has long relied on imports, making it a key product for deep processing of silicone in China.

In the third quarter of 2026, many domestic silicone companies increased their investment in vinyl silicone oil technology and production capacity. Some companies have achieved stable operation of intelligent production lines for low-volatility, high-purity vinyl silicone oil. These products are used in semiconductor packaging, IGBT modules for new energy vehicles, high-end LSR, and medical supplies. This helps to overcome the issue of limited scale production of highly active vinyl silicone oil and increases the self-sufficiency rate of high-end silicon-based raw materials. At the same time, listed companies use funds raised from financing to expand production of electronic-grade vinyl silicone oil. They improve purification processes using existing silicone oil production facilities and develop new materials such as immersion coolants and three-proof coatings. This enhances the range of silicone deep processing products. In terms of processes, technologies like preparing vinyl silicone oil using acidic resin methods and recycling catalysts have been implemented, which simplifies production processes, reduces solid waste, and saves energy. This further narrows the performance gap between domestic products and foreign brands.

From the perspective of market demand, the new energy sector is the main source of growth for vinyl silicone oil. Upgrades to the high-voltage platforms of new energy vehicles have led to increased demand for battery pack encapsulation adhesives and IGBT thermal conductive gels. The encapsulation of photovoltaic modules also requires high-light transmission and low yellowing properties of vinyl silicone oil. In the semiconductor field, chip packaging and power device thermal interface materials drive the purchase of electronic-grade vinyl silicone oil, with significant premium in high-end models. In traditional markets, demand for liquid silicone rubber in consumer electronics, medical supplies, and baby products remains stable, ensuring resilient orders for mid-to-high-end vinyl silicone oil. However, competition in the general-purpose vinyl silicone oil market is intense, with limited profit margins. Companies generally reduce production of low-end products and focus on developing high-value, customized products.

In terms of prices, during the third quarter, supply controls on silicone raw materials maintained a tight balance between supply and demand. Market prices for vinyl silicone oil rose slightly due to upstream monomer prices. Industry analysts believe that during the “Golden September” season, the operating rates of downstream silicone rubber and adhesive manufacturers will increase, leading to continued growth in demand for vinyl silicone oil. However, there is some pressure on cost transmission to downstream users. It is expected that prices will remain stable with minor fluctuations, and significant price increases are unlikely.

Industry experts say that the domestic vinyl silicone oil industry is shifting from simply expanding production capacity to focusing on quality improvement. Future development will focus on three areas: first, continuously improving the stability of high-purity, low-ionic-content products to meet the strict standards for semiconductor and AI server thermal management; second, developing low-smell, low-volatility environmentally friendly vinyl silicone oil to meet regulatory requirements in medical and food contact applications; third, developing customized viscosities and vinyl content products to meet overseas customer needs and expand exports. In the long term, as domestic high-end silicone materials continue to advance, import dependence on vinyl silicone oil will decrease, and domestic companies will benefit greatly from the long-term growth opportunities in new energy and semiconductor materials.