Low-viscosity hydroxyl silicone oil has become a major growth driver, with a potential of hundreds of billions of yuan unleashed in the niche market


1.The application structure optimization leads the demand in the medical and electronic fields
Low-viscosity hydroxyl silicone oil (viscosity 50-500 mPa·s) has become the fastest-growing subcategory in the hydroxyl silicone oil family due to its excellent fluidity and reactivity. Data shows that the domestic market size of low-viscosity hydroxyl silicone oil reached 2.86 billion yuan in 2023 and is expected to exceed 5.2 billion yuan by 2030, with an average annual compound growth rate of 9.2%. The application end has shown a significant upgrading trend. The demand proportion in the medical field has risen from 24% in 2020 to 31% in 2023, mainly used for high-end products such as medical catheters and implantable devices. The electronic packaging field accounts for 27%, providing core raw materials for Mini leds and semiconductor underfill adhesives. The two high-end fields together contribute nearly 60% of the demand.


2. Technological iteration has accelerated the breakthrough of the domestic production rate, reaching a key node
The industry is accelerating its technological upgrade towards low volatility and high purity. The R&D investment intensity of domestic enterprises has reached 4.8% of their sales revenue, an increase of 1.7 percentage points compared to five years ago. Through the optimization of continuous synthesis processes and breakthroughs in impurity control technology, the domestic production rate of low-viscosity hydroxyl silicone oil specifically designed for liquid silicone rubber has exceeded 65%, breaking the long-term monopoly of foreign capital. At present, high-end products can achieve strict standards of volatile matter ≤0.1% and metal ion residue ≤5 ppm, fully meeting the demands of high-end medical and electronic scenarios. The average price of these products is 40% to 60% higher than that of industrial-grade ones.


3. The regional pattern differentiation and the cluster effect of industries have become prominent
The domestic low-viscosity hydroxyl silicone oil industry shows distinct regional agglomeration characteristics. Relying on a complete silicone industrial chain, the Yangtze River Delta region has gathered 73% of the country's large-scale production enterprises, forming a complete ecosystem from raw material supply to deep processing. Relying on the cluster advantages of the electronic manufacturing industry, the Pearl River Delta has occupied a 58% market share in the sub-sector of silicone oil for electronic packaging and has become a core consumption distribution center. The central and western regions, relying on their advantages in raw material resources, have gradually laid out medium and low-end production capacity. A regional collaborative and complementary industrial pattern has gradually taken shape, promoting the overall efficiency improvement of the industry.


4. The release of policy dividends has led to a continuous increase in industry concentration
Policy guidance has injected strong impetus into the development of the industry. High-purity medical low-viscosity hydroxyl silicone oil has been included in the "Guidance Catalogue for the First Batch Application Demonstration of Key New Materials" and enjoys a tax preference of 15% to 20%. At the same time, the tightening of environmental protection regulations has forced an industry reshuffle. Backward intermittent production capacity is accelerating its exit, and the market share of leading enterprises continues to expand. In 2023, the market share of the industry's CR10 enterprises increased by 3.2 percentage points year-on-year to 41.6%. Under the dual drive of future policies and the market, the industry will further concentrate towards scale and high-end.