Hoshine and Dongyue Ramp Up High-End Silicone Oils, Targeting Premium Markets-Iota

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News > Dynamic industry > Hoshine and Dongyue Ramp Up High-End Silicone Oils, Targeting Premium Markets

Hoshine and Dongyue Ramp Up High-End Silicone Oils, Targeting Premium Markets

Amid mounting pressure across the broader silicone industry, leading players are moving counter-cyclically. Hoshine Silicon disclosed in its 2024 annual report that it will invest RMB 1.2 billion to build new electronic-grade and medical-grade silicone oil production lines. Meanwhile, Dongyue Silicone stated on its investor interaction platform that within its 600,000-ton monomer capacity, the share of high-end silicone oils and functional materials will rise from 30% to 45%.

What both companies are betting on are three high-growth sectors with gross margins exceeding 35%: semiconductors, medical applications, and photovoltaics.

A closer look at the announcements reveals distinct strategic focuses. Hoshine is concentrating on electronic packaging and new energy vehicles. Its newly built production lines at the Xinjiang base specialize in low-metal-ion phenyl silicone oils (Na/K < 0.5 ppm), designed for chip underfill materials and IGBT thermal interface gels. At the same time, the company is expanding into medical-grade liquid silicone rubber base oils capable of operation at 0 °C, some of which have already passed validation by medical device customers.

Dongyue, by contrast, is deepening its presence in medical and optical applications. Its medical-grade silicone catheters have obtained FDA certification and entered Medtronic’s supply chain, driving parallel volume growth of high-purity hydroxyl silicone oils and vinyl silicone oils. In the photovoltaic sector, optical-grade silicones and weather-resistant silicone oils have also reached mass production. In addition, silicone sealants for new energy vehicles are ramping up rapidly, with per-vehicle consumption reaching 24 kilograms.

These high-end silicone oils differ fundamentally from traditional industrial-grade products. They require ppm-level impurity control, narrow molecular weight distribution, and compliance with stringent standards such as USP Class VI, ISO 10993, and JEDEC. Thanks to these high technical barriers, gross margins typically range from 30% to 50%, far above the sub-10% margins of general-purpose silicone oils.

For small and mid-sized customers, this wave of expansion presents both challenges and opportunities. The push by leading producers brings two key benefits. First, costs for high-purity silicone oils are declining—large-scale production has reduced prices of electronic-grade phenyl silicone oils by about 20% compared with three years ago. Second, technical services are becoming more accessible, as companies like Hoshine and Dongyue open application laboratories to support downstream customers in customized formulation development.

“In the past, we could only rely on imported silicone oils for high-end compounds,” said the head of a silicone rubber manufacturer in South China. “Now domestic materials meet performance requirements, offer faster delivery, and allow joint process optimization.”

Industry experts suggest that smaller manufacturers proactively engage with leading suppliers’ high-end material promotion programs, starting with small-batch trials to accelerate product upgrades. As the industry shifts from capacity-driven competition to one focused on purity and application expertise, riding the wave of technological upgrading may prove wiser than blind capacity expansion.

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