Silicone Industry Faces “High-Quality Shakeout”: How Can Small Manufacturers Survive?-Iota

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News > Dynamic industry > Silicone Industry Faces “High-Quality Shakeout”: How Can Small Manufacturers Survive?

Silicone Industry Faces “High-Quality Shakeout”: How Can Small Manufacturers Survive?

On one side, orders for electronic-grade phenyl silicone oil are booked six months in advance; on the other, general-purpose 201 silicone oil prices have fallen below cost. China’s silicone industry is undergoing a brutal “high-quality shakeout.” According to the China Fluorosilicone Association, in 2024, national silicone oil capacity utilization was below 60%, yet dependence on imported high-end functional silicone oils remains over 40%. In this “low-end oversupply, high-end shortage” scenario, how can small and mid-sized manufacturers break through?

The answer is emerging: focus on specialization, not scale; emphasize value, not price. A group of small manufacturers is stabilizing their position and even growing against the trend through three strategies:

1. Deeply focus on niche applications. A Zhejiang company abandoned commodity products and developed “medical-grade hydroxyl silicone oil for catheter lubrication,” obtaining ISO 13485 certification and entering three domestic infusion pump supply chains. A Shandong factory focuses on low-volatility silicone oils for photovoltaic junction box encapsulants, controlling acid value below 0.02 mg KOH/g, becoming a tier-2 supplier to leading PV module makers.

2. Collaborate with major clients on joint development. No more “one-off transactions,” instead integrating into downstream formulations. “We share GPC and GC-MS data with clients, providing viscosity–molecular weight curves for each batch,” said a factory manager in South China. This close collaboration enabled a 15% market share in thermal gel base oils.

3. Advance green compliance. Companies that first secured D4/D5-free declarations and carbon footprint reports are earning export premiums. “One SVHC report secured a three-year European client contract,” admitted an exporter.

The industry consensus is clear: in the next five years, silicone oil manufacturers without technical barriers, compliance certifications, or application understanding will be phased out. For small manufacturers who maintain purity, refine details, and patiently focus on quality, this shakeout is also an opportunity—high-end demand exists, but reliable supply is scarce.

To all domestic silicone oil professionals still tweaking formulas in the lab, monitoring viscosity on the shop floor, and replying to client emails late at night:
You are not backward capacity—you are the capillaries of China’s material independence.
When the world demands purer, more stable, and greener silicone fluids, someone is quietly ensuring ppm-level consistency.

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