(October 19, 2026) With the rapid expansion of AI computing infrastructure, 800V high-voltage new energy vehicles, and the Mini/Micro LED optoelectronic packaging industry, phenyl silicone oil—a key specialty organic silicon material—is experiencing a new period of surging demand. According to investigations conducted in China’s new organic silicon materials industry, after more than a decade of continuous technological research, China has successfully achieved independent mass production of phenyl silicone oil across the entire product spectrum, ranging from low-phenyl-content general-purpose varieties to ultra-high-phenyl-content specialty high-purity grades. Numerous key performance indicators of these products have reached international advanced levels, effectively breaking the decades-long monopoly held by foreign firms in the premium phenyl silicone oil market. As a crucial foundational material for high-end manufacturing, strategic equipment, and digital infrastructure, the process of replacing imported phenyl silicone oil with domestic alternatives is being implemented across numerous downstream sectors, thereby driving a structural upgrade within the specialty organic silicon industry.

Phenyl silicone oil, also known as methylphenylpolysiloxane, is a high-end specialty silicone oil obtained by modifying the molecular chain of dimethyl silicone oil through the introduction of phenyl groups. It represents a core segment within the organic silicon materials family, renowned for its outstanding performance characteristics. Conventional dimethyl silicone oil has limitations such as easy crystallization at low temperatures and susceptibility to oxidative decomposition at high temperatures. However, the incorporation of phenyl groups significantly broadens the material’s stable operating temperature range while endowing it with excellent radiation resistance, high electrical insulation properties, superior optical transparency, low volatility, and strong anti-aging capabilities. Within the industry, products are categorized into three groups based on phenyl content: low-phenyl silicone oil, with phenyl content below 10%, retains excellent low-temperature fluidity and is primarily used for lubrication in extreme conditions within aviation and precision machinery; mid-phenyl silicone oil with phenyl content between 10% and 30% exhibits markedly improved heat resistance and electrical insulation properties, making it the preferred insulating medium for high-voltage electrical equipment and new energy devices; high-phenyl silicone oil, containing more than 30% phenyl groups, can achieve a refractive index exceeding 1.50—with certain custom grades reaching 1.58. This type of silicone oil offers high optical transparency, low stress levels, and resistance to yellowing, rendering it an irreplaceable material for optoelectronic packaging and optical components; its production, however, has historically posed the greatest challenges in terms of domestic production.

For many years, the core synthesis and purification technologies for high-purity, ultra-high-phenyl-content phenyl silicone oil remained under the control of a handful of overseas materials giants, forcing China’s premium market to rely heavily on imports. The main obstacles to industrialization of this material included precise regulation of its molecular structure, stable operation of copolymerization reactions, and effective removal of impurities. In sectors such as semiconductors, optoelectronics, and nuclear industries, the allowable levels of metal ions and cyclic siloxane residues in phenyl silicone oil are limited to the parts-per-billion range. Yet common problems such as batch-to-batch color variation, broad molecular weight distribution, accelerated degradation after prolonged exposure to high temperatures, and excessive levels of trace impurities frequently arise. Certification by high-end downstream clients typically takes several years, creating formidable technical and market barriers.

Leading domestic organic silicon enterprises, collaborating with university-based materials research teams, have been working tirelessly to overcome these challenges. They developed a solid-acid-catalyzed synthesis process paired with a three-stage molecular distillation purification technique. Additionally, continuous-flow microreactors and an AI-driven system for dynamic regulation of synthesis parameters were implemented, effectively resolving these industry-wide issues. Independent authoritative test results indicate that the newly developed domestically produced ultra-high-purity phenyl silicone oil boasts a purity level of 99.99%, total metal ion content below 1 ppb, and cyclic volatile impurities such as D3–D10 kept under 200 ppm. Even after 1,000 hours of aging at 250°C, its performance degradation remains under 2.5%; under intense gamma-ray irradiation at 10⁶ Gy, its physical and chemical properties remain largely unchanged. Its refractive index range can be precisely controlled between 1.52 and 1.58, fully matching the performance of leading international products. As of 2026, multiple domestic production lines with capacities of tens of thousands of tons per year are now operating at full capacity, enabling customized production for industries such as aerospace, semiconductors, artificial intelligence computing, and new energy. This has effectively addressed a critical gap in China’s premium phenyl silicone oil supply chain.From the perspective of downstream markets, various emerging fields are creating new opportunities for the use of phenyl silicone oil. Among these, immersion liquid cooling for AI computing systems represents the fastest-growing application area. Phenyl silicone oil boasts high insulation properties, low volatility, and strong thermal stability, making it ideal for meeting the cooling needs of high-density GPU clusters that operate continuously for long periods. Its thermal conductivity reaches 0.2 W/m·K, which helps to overcome the drawbacks of traditional cooling fluids, such as corrosion, high volatility, and safety risks. Currently, many data centers and supercomputing projects in China are adopting immersion liquid cooling solutions based on phenyl silicone oil, and the computing industry has become a key driver of demand for high-quality phenyl silicone oil.

The high-voltage platforms used in new energy vehicles represent the second most important market for this product. Data shows that the penetration rate of domestically produced phenyl silicone oil in 400V new energy vehicle platforms has exceeded 85%. Previously, the success rate of domestic materials in 800V high-voltage platforms was only 43%. However, the new generation of automotive-grade phenyl silicone oil has passed the IATF 16949 quality standards for the automotive industry, and can be used for sealing IGBT power devices as well as for insulation and heat management in a vehicle’s high-voltage systems. Using domestic materials instead of imported ones can help reduce the overall supply chain costs by around 22%. Leading domestic battery and vehicle manufacturers are already starting to adopt these materials on a large scale, with applications in vehicle inverters and sealing components for hydrogen energy equipment. This has contributed to an annual growth rate of over 18% for the market for phenyl silicone oil used in vehicles.

In the semiconductor and optoelectronics sectors, ultra-high-purity optical-grade phenyl silicone oil is being used in the manufacturing of Mini/Micro LEDs, in the sealing of power chips, and as an optical coating material for flexible OLEDs. This product has a light transmittance of 96.5%, with a yellowing index of less than 2.5. Its use can extend the lifespan of chips by about 50% and increase the packaging success rate from 92% to 98.5%. All these characteristics meet the standards set by JEDEC for international electronic materials. Leading domestic panel manufacturers and packaging companies are gradually replacing imported materials with these domestic alternatives, thereby reducing reliance on foreign optical silicone materials in the optoelectronics industry. Additionally, due to its ability to function in wide temperature ranges and its resistance to radiation, phenyl silicone oil is also used as lubricant for aircraft engines, as a protective material for deep-sea equipment, and as a special fluid in the nuclear industry. In consumer products, cosmetic-grade phenyl silicone oil is used in high-end skincare and makeup formulations due to its excellent spreading properties and skin-friendly characteristics. In the precision machinery industry, it is used as a long-lasting high-temperature lubricant.

According to market research, the global market for phenyl silicone oil is expected to grow at an average annual rate of around 7.3% from 2024 to 2030. The Asia-Pacific region accounts for more than 58% of global consumption, with China being the key region for growth. The new generation of long-chain phenyl silicone oil, which is considered a high-value product, is growing rapidly. By 2026, the domestic market size for this product is expected to exceed 3.5 billion yuan, representing a year-on-year increase of 42%. Analysts predict that by 2028, this market size could reach 8 billion yuan.

Government policies continue to support the development of this industry. The “Action Plan for the Industrialization of Advanced Organic Silicon Functional Materials (2025–2027)” identifies phenyl silicone oil as a key strategic material, offering research subsidies, tax incentives, and insurance coverage for new products of this type. The Ministry of Industry and Information Technology has also established guidelines for green manufacturing of organic silicon products, setting strict limits on energy consumption and VOC emissions. These measures aim to eliminate low-value, conventional production methods and encourage the industry to move toward higher purity, customized, and low-carbon manufacturing processes. Green manufacturing techniques have become an important competitive advantage. Some domestic factories use supercritical carbon dioxide synthesis systems, which reduce solvent usage by 95% and significantly cut pollution emissions. Research on bio-based phenyl silicone oil has yielded promising results; compared to traditional products, these materials have a 40% lower carbon footprint. They have already received the ECOCERT environmental certification from the EU. By 2026, green phenyl silicone oil is expected to account for more than 40% of the total market share, with this figure likely to rise to 60% by 2028.Although domestic phenyl silicone oil has achieved significant breakthroughs in industrialization, the industry still faces numerous challenges. On one hand, for certain special custom grades designed for extreme operating conditions, the period required to accumulate reliable data regarding their long-term performance is relatively short; meanwhile, the product validation process by high-end downstream customers generally takes a long time. On the other hand, there remains a certain degree of dependence on foreign sources for some high-end testing instruments and specialized additives. In terms of international competition, established overseas materials companies continue to maintain a stable market share among high-end foreign clients, thanks to their long-standing brand reputation and well-developed global service networks. Additionally, exporting phenyl silicone oil necessitates compliance with various chemical regulations in different countries, such as the EU’s REACH and South Korea’s K-REACH. This results in high costs related to material testing and registration, thereby posing a challenge to domestic enterprises’ ability to expand into overseas markets. Furthermore, fluctuations in the prices of upstream raw materials and ever-tightening environmental regulations also test companies’ capabilities in cost control and meticulous operational management.

Looking ahead, it is widely believed that from 2026 to 2028, the phenyl silicone oil industry will continue to benefit from the booming growth of sectors such as AI computing power, new energy vehicles, and third-generation semiconductors. Research and development efforts will focus on developing phenyl silicone oil with lower ionic residues, enhanced thermal conductivity, and an extremely high refractive index; efforts will also continue to refine low-carbon and bio-based green synthesis methods. Domestic phenyl silicone oil manufacturers are expected to adopt a dual-strategy approach: domestically, they will strive to obtain validation from downstream clients and accelerate import substitution; internationally, they will seek to expand their presence in B2B markets within fields such as optoelectronics, new energy, and computing power, while improving their global marketing and technical service systems.

As the level of self-reliance regarding special organic silicon-based materials like phenyl silicone oil continues to rise, this will further strengthen the foundation of key materials for China’s infrastructure supporting AI computing power, new energy, aerospace, and other high-end manufacturing sectors. This progress will enable China’s organic silicon industry to transition from producing bulk basic raw materials to occupying the higher-value segments of the global specialty silicone materials value chain.