The global silicone market was valued at USD 15 billion in 2021 and is estimated to reach an expected value of USD 21 billion by 2030 at a CAGR of 4% during the forecast period (2022-2030). Silicone is widely used in various end-use industries such as construction, electronics, transportation, healthcare, personal care & consumer goods, energy, and industrial process, among others. Fluids, gels, resins, elastomers, adhesives, and emulsions are the significant silicone types used in various end-use industries. Increasing demand for elastomers from various applications, such as electric vehicles, architectural elements, energy, and electronics, owing to their favorable properties such as excellent thermal resistance, chemical resistance, water repellence, and dielectric properties are anticipated to substantially fuel the demand for silicone elastomers over the forecast period. Increasing concerns regarding growing CO2 emissions among governments worldwide are anticipated to fuel the demand for electric vehicles globally. This is expected to create lucrative opportunities for silicone in the transportation industry in the coming years.
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Growing Construction Activities are Pushing the Demand for Silicone
Silicone is widely used construction industry because it is weather-resistant, highly stable, and inert & high-water repellent. It is used in conjugation with several materials such as marble, glass, concrete, aluminum, steel, and polymers, which find application in residential and commercial constructions. In addition, they are also used in the construction of roads, bridges, pipelines, oil rigs, and industrial units. Rising population, increasing urbanization, and rapid industrial growth have resulted in the growing need for construction and infrastructure development across the globe.
China, India, Japan, and other Southeast Asian countries are considerably contributing to the growth of the building sector in the Asia Pacific. Growing middle-class population, Increasing industrialization & urbanization, and improving living conditions are the key factors fueling construction expansion in the region.
Rising infrastructure spending in China is expected to fuel the construction industry's growth over the forecast period. For instance, in January 2019, China approved the investment of USD 142 billion on 26 infrastructure projects, including rail projects in Chengdu, Kunming, Chongqing, Zhengzhou, and Xian, and the expansion of the Xianyang International Airport. According to an article published by the World Resources Institute in 2019, China is expected to invest USD 13 trillion in construction activities by 2030. All these steps taken by China's government to boost the country's construction industry are expected to drive the demand for silicone over the forecast period.
Increasing Demand from Various End-Use Industries
The silicone market is expected to grow owing to the increasing application scope in various end-use industries. In the electronics industry, silicone is used in a broad range of electronic applications such as for protecting insulators from salt air damage, moisture-proofing of boards, modification of semiconductor encapsulating materials, and protecting the ends of heating element wires in printed circuit boards (PCBs), semiconductors, and electronic control units (ECUs), LED devices, and others.
Silicones are extensively used in various industrial processes, such as antifoaming agents and lubricants in offshore drilling and paper production, industrial coatings, and paint additives. Properties such as increased durability, resistance to chemicals, and corrosion & thermal resistance are substantially propelling the demand for silicones in coating applications.
Industrial coatings are used in various applications, including automotive, oil & gas, marine, aerospace, and electronics. Technological advancements such as self-driving cars and increasing demand for electric vehicles are fueling the growth of the automotive industry, which, in turn, is anticipated to create lucrative opportunities for silicone in automotive coatings.
Several regulatory authorities regulate the use of silicone. For instance, the European Chemicals Agency (ECHA) limits the use of two silicone materials, cyclosiloxanes D4 and D5, used in personal care products. These substances are restricted to a concentration of 0.1% by weight in personal care products. The food and Drug Administration (FDA) compel manufacturers to meet the ASTM method D1418-81 to produce silicone elastomer in the U.S.
Healthcare is among the highly regulated end-use industries. USP Class VI-approved silicones are considered medical-grade silicone. The regulatory bodies should approve all medical-grade silicones before being commercialized. Center for Drug Evaluation and Research (CDER), the Center for Devices and Radiological Health (CDRH), and European Union are some regulatory bodies that regulate the use of silicone in medical and pharmaceutical applications. Hence, the presence of strict regulations is expected to hamper the growth of the silicone market.
The Rise in Demand for Electric Vehicles
The global demand for electronic vehicles has increased in the past few years, encouraging manufacturers to introduce electric vehicles in their product portfolios. This has increased the demand for silicone in electrical vehicle components. Silicon elastomers enable the protection of the components of electric vehicles from dissipating battery heat and shield them from electromagnetic interference. Excessive heat emitted from the battery accelerates battery deterioration, affecting charging efficiency. This, in turn, has an impact on vehicle performance. Elastomers enable effective thermal management of the battery, which is one of the essential components of an electric vehicle. Silicone resins exhibit beneficial properties, including weatherability, water resistance, and flame retardancy, along with dielectric properties, due to which silicone resins find use in coil impregnation. The cure speed and hardness of silicone resins depend on the type of organic substitutes attached and their molecular weight. Silicone resins are also used as binders for molding with other materials because of their better heat resistance and dielectric properties. The rise in demand for electric vehicles globally has generated growth opportunities for the silicone market in the coming years.
The global silicone market is segmented by product, end-use, and region.
By product, the global market is segmented into fluids, gels, resins, elastomers, and others. The fluid segment accounted for the largest market share and is estimated to grow at a CAGR of 4.2% during the forecast period. With good thermos-oxidative resistance in activities between -60 degrees and +300 degrees, silicone fluids are transparent, odorless, and clear liquids. These products also have excellent shear stability, little volatility, low surface tension, and best-in-class water repellency. Silicone fluids have been categorized as straight silicone fluids and modified silicone fluids. Straight silicone fluids such as methyl phenyl silicone, dimethyl silicone, and methyl hydrogen silicone are physiologically inert and have excellent thermo-oxidative stability, water repellency, chemical stability, and defoaming properties. These properties make them ideal for applications in cosmetics, paint additives, water-repellency treatments, and processing glass, metal, fibers, and powders. Over the projected period, the demand for cosmetics is anticipated to increase due to rising personal care awareness and rising use of the product as additives in paints and coatings.
By the end, the global market is segmented into electronics, transportation, construction, healthcare, personal care, consumer goods, energy, industrial processes, and others. The construction segment accounted for the largest market share and is estimated to grow at a CAGR of 4.3% during the forecast period. Silicone-based sealants are used for window sashes & metals, concrete joints in public work projects, and plumbing penetration seals because of their resistance to oil and weather, driving the segment growth. Global demand for building and infrastructure development has increased due to rapidly expanding urbanization, rising population, and industrial growth. Moreover, numerous initiatives by various governments, such as China's plan to invest USD 142 billion in 26 infrastructure projects in 2019 and India's Housing for All and Smart Cities project to provide housing to its population and develop infrastructure connecting rural & urban areas, is expected to accelerate the growth of construction industry. These factors will likely significantly boost the demand for silicones in construction end-use over the forecast period.
By region, the global silicone market is segmented into North America, Europe, Asia Pacific, Central & South America, and Middle East & Africa.
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Asia Pacific emerged as the largest silicone market and is expected to grow at a CAGR of 5% over the forecast period. The region's substantial market share can be due to numerous prominent, medium, and small-sized market participants. Throughout the forecast period, silicone production in the region is anticipated to increase as a result of market players moving their production facilities from Europe and North America to Asia due to factors like greater raw material availability, inexpensive labor, and more market penetration opportunities in end-use industries like transportation, construction, industrial process, personal care, and consumer products, electronics, healthcare, and energy. The region is expected to grow at the fastest rate on account of acceleration in price growth. With China manufacturing more high-value goods, the production of lower-valued products would shift to India and Southeast Asian countries. Transportation, electronics, construction, and personal care are expected to be the primary markets for silicones.
Europe is the second largest. It is estimated to reach an expected USD 5220 million by 2030 at a CAGR of 3.6%. The Europe silicone market is primarily driven by the rising demand for lightweight silicones in transportation and construction. During the projected period, the product demand is anticipated to increase due to the expansion of the construction industry in countries such as the United Kingdom, Germany, Spain, and France. The growth of the construction industry in the region is anticipated to be bolstered by a combination of increased EU financing and supportive policies (such as tax breaks, incentives, and subsidies) adopted by multiple governments. However, the spread of COVID-19 in countries such as Italy, Spain, Germany, and France has hampered the product demand in building & construction, transportation, and consumer goods applications. In the transportation sector, the demand is majorly driven by the rising adoption of silicone material in the electric vehicles market. The EU Commission has built a strategy for low-emission mobility that incorporates long-term objectives of decreasing the oil import reliance with subsequent implementation of electrification of transport facilities. This move will likely lead to a rise in the number of low and zero-emission vehicles, such as plug-in hybrids, fully electric cars, and fuel cell vehicles in the region. As a result, the demand for silicone in electric vehicles will increase over the forecast period. Additionally, the expanding use of silicone in the healthcare industry for cosmetic implants and in the renewable energy industry for uses in solar panels and wind turbines is anticipated to propel market expansion throughout the projected period.
North America is the third-largest region due to the growing consumption of silicone in various applications in transportation, construction, industrial process, personal care, and consumer goods and energy industries in the region. North America is one of the leading markets for silicone additives owing to its high demand in plastics and composites, manufacturing chemicals, paints and coatings, and food and beverages. In addition, the region has high growth potential for medical-grade silicones driven by robust demand from the healthcare industry and several large regional manufacturers. Rising demand for minimally invasive surgeries, advanced implant devices, and the availability of sophisticated healthcare infrastructure in the U.S. is expected to be among the favorable growth factors over the forecast period. Moreover, increasing expenditure for hydraulic fracturing in Canada to increase the yield of tight oil and shale gas is likely to increase the demand for silicone-based sealants and gaskets for oil & gas industrial machines. According to Canada.ca, in 2018, the exploration expenditures for base metals in Canada surged by 13% and are expected to show positive growth in the coming years.
The global silicone market is fragmented in nature, with the presence of various prominent players such as Shin-Etsu Chemical Co., Ltd., Wacker Chemie AG, Illinois Tool Works Inc., Evonik Industries AG, Hutchinson, Kemira Oyj, Dow Inc., AbbVie Inc., KCC Corporation, and Elkem ASA,