Silicone Potting Compounds Market - Forecast(2023 - 2028)

Silicone Potting Compounds Market Overview

Silicone potting compounds market size is forecast to reach US$ 1,201.5 million by 2026, after growing at a CAGR of 3.8% during 2021-2026, owing to the increasing usage of silicone polymers based potting compounds over the polyester system, epoxy, polyurethane resin counterparts in various end-use industries such as automotive, aerospace, electronics, and more. Silicones are also suitable materials for potting delicate surface mount devices due to their elasticity and low modulus, which helps to prevent harm from thermal expansion and contraction, which is expected to increase the market demand. 

The rapid growth of the electrical & electronics industry has increased the demand for silicone potting compounds; thereby, fueling the market growth. Furthermore, the flourishing aerospace industry is also expected to drive the silicone potting compounds industry substantially during the forecast period.

COVID-19 Impact

The pandemic of COVID-19 is wreaking havoc on the automobile and electronics industries. Owing to import-export restrictions imposed by governments in different regions, there is a pause in electronic item imports and exports. Additionally, car manufacturing has been disrupted, resulting in a significant decline in the overall automotive market. Demand for new commercial vehicles in the EU remained low in June 2020 (-20.3 percent), according to the European Association of Automotive Manufacturers, though the rate of decline slowed compared to April and May. Three of the region's four main markets saw double-digit percentage declines last month: Germany (-30.5 percent), Spain (-24.2 percent), and Italy (-12.8 percent), while France saw a slight increase (+2.2 percent). With the decrease in automotive and electronics production, the demand for silicone potting compounds has significantly fallen, which is having a major impact on the silicone potting compounds market.

Silicone Potting Compounds Market Report Coverage

The report: “Silicone Potting Compounds Market – Forecast (2021-2026)”, by IndustryARC, covers an in-depth analysis of the following segments of the silicone potting compounds Industry.

By Curing Technique: UV Curing, Thermal Curing, and Room Temperature Curing
By Application: Capacitors, Transformers, Cable Joints, Industrial Magnets, Solenoids, Surface Mount Packages, Beam Bonded Components, Memory Devices, Microprocessors, and Others
By End-Use Industry: Automobile (Passenger Cars, Light Commercial Vehicles (LCV), Heavy Commercial Vehicles (HCV), and Others), Electrical & Electronics, Aerospace & Defense (Commercial, Military, and Others), Industrial, Solar Energy, and Others
By Geography: North America (U.S., Canada, and Mexico), Europe (U.K, Germany, France, Italy, Netherlands, Spain, Russia, Belgium, and Rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia and New Zealand, Indonesia, Taiwan, Malaysia, and Rest of APAC), South America (Brazil, Argentina, Colombia, Chile, and Rest of South America), Rest of the World (Middle East, and Africa)

Key Takeaways

• Asia-Pacific dominates the silicone potting compounds market, owing to the increasing electrical & electronics industry in the region. According to the Electronic Industries Association of India (ELCINA), the total production of the electronics sector in India was Rs 387,525 crore in 2017-18, exhibiting a growth of about 22%.
• Metermix dispenses equipment is widely utilized for processing single and two-component materials such as epoxies and polyurethane resins, and silicone polymers. It then offers solid solutions for a wide range of applications such as bonding, sealing, potting, encapsulation, reaction injection molding, and more.
• Silicone potting compounds possess extensive characteristics such as wide operating temperature range, excellent electrical properties, hardness range, good chemical, humidity, & water resistance, offers ease-of-use, and more. These properties of silicone potting compounds are projected to increase market growth.

 Figure: Asia-Pacific Silicone Potting Compounds Market Revenue, 2020-2026 (US$ Million)

Silicone Potting Compounds Market Segment Analysis – By Curing Technique

The UV curing segment held the largest share in the silicone potting compounds market in 2020 up to 48%, owing to its ability to cure the silicon compound in few seconds, which is time-intensive in other curing techniques. UV curing can be done in a moment; it is also commonly used in compounds for silicone potting. In addition, the high degree of permanency of the potting compound provides electronic devices with high resilience and resistance, thus increasing consumer demand. All these extensive characteristics of coated glass are the key factors anticipated to boost the demand for coated glass in various regions during the forecast period.

Silicone Potting Compounds Market Segment Analysis – By Application

The surface-mount packages segment held the largest share in the silicone potting compounds market in 2020, owing to the growing application of printed circuit boards (PCB) in electronic devices. The silicone potting compound gives protection from chemicals, humidity, dust, and bumps. In addition, it donates flame retardant and excellent electrical insulation properties, an additional benefit for onboard applications like trains, automotive, marine transportation, which is the major driving factor for the advanced glass market during the forecast period. Furthermore, the solenoids market is expected to witness the highest market growth, owing to the growing application in water treatment plants for non-corrosive applications.

Silicone Potting Compounds Market Segment Analysis – By End-Use Industry

The electrical & electronics segment held the largest share in the silicone potting compounds market in 2020 and is growing at a CAGR of 6.4% during 2021-2026, owing to the rise in demand for consumer electronics and the emergence of smart devices. Within the electronics sector, silicone polymers potting compounds are primarily used to fabricate capacitors, memory devices, solenoids, transformers, and more, over its counterparts such as polyester systems, epoxy, and polyurethane resin. 

Also, the amount of heat given off during the curing of silicone resins is very low, making them especially suitable for use in components sensitive to potting temperature. Silicones, like most common metals and plastics, have excellent adhesion to a wide variety of substrates. Thus, the increasing application of silicone potting compounds is the major factor driving the demand for silicone potting compounds in the electrical & electronics market during the forecast period. 

Furthermore, government policies that are thriving in the electrical and electronics industry are expected to propel the market forward. For instance, the Russian prime minister introduced a Strategy for the Development of the Manufacturing Sector up to 2024 and until 2035, which will eventually drive the silicone potting compounds market.

Silicone Potting Compounds Market Segment Analysis – By Geography

Asia-Pacific region held the largest share in the silicone potting compounds market in 2020 up to 36%, owing to the increasing demand for silicone potting compounds from the electrical and electronics industry in the region. Its inherent high flexibility makes these resins especially suitable for applications where a high degree of thermal shock or high thermal cycling frequency is involved. 

According to China's National Integrated Circuit Development Promotion Outline, the Chinese government will make significant efforts to support the electronics industry, especially IC manufacturing and design. China's annual average rate of increase in IC output will be over 14 percent by 2022. 

According to Invest India, India's share of global electronics manufacturing has increased from 1.3 percent in 2012 to 3 percent in 2018. Furthermore, by 2025, India's consumer electronics and appliances industry is projected to be the fifth-largest in the world. India's digital economy could be worth US$800 billion to $1 trillion by 2025, and it could account for 18 to 23 percent of overall economic activity. Thus, with the expanding electronics industry, the demand for silicone potting compounds will also subsequently increase, which is anticipated to drive the silicone potting compounds market in the APAC region during the forecast period.

Silicone Potting Compounds Market Drivers

Increasing Automotive Production

There is an increasing demand for silicone potting compounds from the automotive sector, owing to the rise in demand for various automotive sensors, actuators, and LED lamps in vehicle electrification; thus, positively impacting the silicone potting compounds market growth. According to the International Trade Administration (ITA), China is the world's largest vehicle sector, with the Chinese government expecting vehicle production to surpass 35 million by 2025. 

According to the International Clean Transport Council (icct), new car registrations in the EU have risen marginally to a level of 15.5 million in 2019. In 2019, the sport utility vehicle (SUV) category accounted for nearly 5.7 million new vehicles, 10 times as many as in 2001. India's annual production in 2019 was 30.91 million vehicles, according to Invest India, compared to 29.08 million in 2018, recording a healthy 6.26 percent growth. Also, by 2026, the US$118 billion Indian car industry is projected to cross US$300 billion. Thus, increasing automation production will require more silicone potting compounds for manufacturing various automotive components, which will act as a driver for the silicone potting compounds market during the forecast period.    

Flourishing Aerospace Industry 

For decades, the durability of silicone and its high-temperature tolerance has made it a reliable alternative, and it is still one of the most powerful materials used in aerospace production today. Silicones bind various materials together, seal joints, electronic coat and encapsulate, and isolate and protect sensitive equipment from extreme temperatures and exposure to weather. Thus, there is an increasing demand for silicone potting compounds from the aerospace sector. China was the second-largest civil aerospace and aviation services market in the world in 2019, and one of the fastest-growing markets, according to the International Trade Administration (ITA). 

In November 2020, Boeing projected that China's airlines will buy $1.4 trillion worth of 8,600 new aircraft and $1.7 trillion worth of commercial aviation services over the next 20 years. According to Boeing's current business forecast, the Middle East would need 2,520 new aircraft by 2030. Also, according to Boeing, demand for 2,300 aircraft, worth US$320 billion, is expected to rise over the next 20 years in India. Hence, the increasing aviation industry acts as a driver for the silicone potting compounds market.

Silicone Potting Compounds Market Challenges

Availability of Low-Cost Alternative

The availability of low-cost alternatives such as epoxy resin, polyurethanes may negatively impact the silicone potting compound's market growth during the forecast period. Silicone resins tend to be more costly than epoxies or polyurethane resins, but are found to be used at high or medium continuous operating temperatures (-50 to 200 °C). Although there are some benefits to silicone potting compounds, polyurethanes tend to perform better for many applications. 

The primary benefit of silicone potting compounds is the high thermal tolerance of the material (over 160 ° C) thus providing a soft polymer. However, it should be noted that the thermal range of polyurethane can comfortably withstand the working temperatures of many industrial electronics, and its lower cost makes it a better choice for a broader range of applications. which is limiting the market growth. Thus, these factors are hampering the silicone potting compound's market growth during the forecast period.

Market Landscape

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the silicone potting compounds market. Major players in the silicone potting compounds market are Henkel AG & Co. KGaA, Dow Silicon Corporation, Novagard Solutions, LORD Corporation, ELANTAS GmbH, Master Bond Inc., MG Chemicals, and Dymax Corporation.

Acquisitions/Technology Launches

• In January 2019, SilGel 612, a low viscosity silicone sealant from WACKER, was introduced by Intertronics. SilGel 612's properties make it a good sealant for electronic product manufacturers, particularly for potting and encapsulating electronic control units, sensors, and printed circuit boards.

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