Silicone Potting Compounds Market

Market Overview

The global silicone potting compounds market size was valued at USD 1,050 million in 2022. It is projected to reach USD 1,507 million by 2031, growing with a CAGR of 4.1% during the forecast period (2023–2031).

Potting is the process of filling an electronic assembly or component with solid compounds for environmental protection. Potting compounds are commonly used to insulate and protect electronic devices from moisture. The process of potting can be performed manually or with automated meter-mix-dispense (MMD) equipment. Silicone, epoxy, and polyurethane are among the most common materials used for potting. Silicone polymers have a broad operating temperature range, superior electrical properties, a range of hardness, good chemical, humidity, and water resistance, and are user-friendly.

The demand for silicone potting compounds is expected to increase in the near future, owing to the boom in the electronics industry. In addition, the rise in the need to shield sensitive components from extreme environments used in end-use industries, such as automotive, computing, communications, and others, is anticipated to fuel the market growth during the forecast period.

Market Dynamics

What are the factors driving the market growth?

Growth in the Consumer Electronics Industry

Improvement in economic condition and growth in disposable income are the two key factors that propel the consumer electronics industry's growth. After the 2009 economic crisis in Europe and China, the world economy witnessed a standstill. However, a strong recovery from the crisis results in strong economic growth, especially in developing economies, and has led to an increase in disposable income among the middle-income groups, consequentially adding to the middle-class population. In addition, the disposable income of individuals in North America and the Asia-Pacific regions witnessed high growth, thus, acting as a major driver for the market, as medium- and high-income consumers in urban areas are shifting their consumption trend from essential to premium goods. This trend favors the consumer electronics industry to enhance its product portfolio in the consumer electronics segment. Therefore, the high application of silicone potting compounds as memory devices & microprocessors, capacitors, transformers, cable joints, and others in consumer electronic goods is anticipated to foster the market's growth.

A Rise in Demand in the Aerospace and Industrial Sectors

An increase in government spending in the aerospace sector for commercial, industrial, and military applications and a rise in demand for the airline industry due to wealth creation in Asia and the Middle East are anticipated to drive the growth of several industries, including aerospace, automobile, electronics, and others. Therefore, the rise in the application of silicone potting compounds in these industries, such as in aerospace as flame retardants, weather guards, shock absorbers, and others, propels the growth of the silicone potting compounds market.

What are the factors restraining the market growth?

Selection of Silicone Potting Compounds for Specific Applications and Availability of Low-cost Substitutes

Silicone potting compounds come in various combinations such as color (clear, translucent, off-white, milky white, grey, and yellowish tint & greenish tint), viscosity level ranging from 200 to 35,000 centipoise, corrosiveness, and others. Such potting compounds are used for specific applications. For instance, silicone potting compound with low viscosity of 200 centipoises, fast cure & non-corrosive silicone is used in potting electronic goods that require transparent silicone covering. Also, silicone potting compound, with a high viscosity of 35,000 centipoises, is used to weather high temperatures up to 200°C. Whereas polyurethanes product, a substitute for silicone potting, can be used for multiple applications of silicone potting at a lower cost. In addition, the availability of other low-cost substitutes, such as epoxy resin, can negatively impact the market growth.

What are the future opportunities for silicone potting compounds?

Increase in Demand from the Automotive Industry

The rise in urbanization and economic growth has led to an increase in the demand in the automotive sector for transporting goods & passengers. In addition, the development of electric vehicles is further anticipated to boost the growth of the automotive industry, owing to an increase in demand for fuel-efficient, high-performance, and low-emission vehicles. The versatile properties of silicone potting compounds, including heat resistance, elasticity, water repellence, and chemical resistance, generate high demand for silicone potting compounds in the manufacturing of automobiles. Thus, the growing demand of the automotive industry is anticipated to fuel the silicone potting compounds market growth.

Segmental Analysis

The global silicone potting compounds market is segmented based on curing technique, application, and end-user.

Based on curing techniques, the market is classified into UV curing, thermal curing, and room temperature curing.

The UV curing segment dominates the market, registering a CAGR of 4.3%. UV curing initiates a photochemical reaction in silicone potting compounds, which generates a cross-linked network of polymers. UV-curable silicone potting compounds offer high electrical insulation properties and excellent bond strength. Some quick UV-curable silicone compounds, such as NOVAGARD Silicones UV cured, can be cured in seconds with lower energy consumption. UV curing technique can cure the silicone compound in a few seconds, which is time intensive in other techniques. UV curing can be achieved in a moment; therefore, it is widely used in silicone potting compounds.

The application areas of this industry are surface mount packages, beam-bonded components, memory devices & microprocessors, capacitors, transformers, cable joints, industrial magnets, solenoids, and others.

The surface mount package dominates the market, registering a CAGR of 3.9%. It involves directly mounting the surface of electrical components onto the printed circuit board (PCB). Some of the widely used surface mount packages include resistors and inductors. In silicone potting, a liquid layer is poured into the pot, covering the device completely. As the solder joint in surface mount packages cannot withstand the high strain, silicone potting is added to the surface, absorbing the high impact and transmitting the reduced shock to the solder joints.

Based on the end user, the market is classified into electronics, aerospace, automotive, industrial, and others.

The automotive segment dominates the market, registering a CAGR of 4.8%. Silicone potting compounds are used in various automotive parts, including automotive sensors (pressure and temperature), actuators, LED lamps, to protect these sensitive components from damage, and moisture & dust components. These compounds also protect against mechanical stress and vibration. Room temperature vulcanizing silicone (RTV) is widely used for automotive applications due to its high design flexibility and low cost compared to other compounds.

Regional Analysis

The global market for silicone potting compounds is divided into four regions: North America, Europe, Asia Pacific, and LAMEA.

Asia-Pacific accounted for the maximum share in the global silicone potting compounds market, registering a CAGR of 5.2%, owing to the presence of a large number of manufacturers in the electrical and electronics sector. China being a prominent exporter of consumer electronics products in large volume will positively fuel the growth of the silicone potting market in the Asia-Pacific region. The great demand for electronics and machinery in countries such as China and India drives the silicone potting market. In addition, large exports of electronics products from these countries will surely enhance the market growth. Moreover, an increase in the adoption of silicone potting to protect boards, battery cells, or finished parts from shock transfer during high energy impact will fuel the market demand in electric vehicles and other automotive segments. Furthermore, the demand for solar energy, where silicone is widely used for potting solar cells, is expected to boost the market growth during the forecast period.

The North American silicone potting compounds market is growing with a CAGR of 3.5%. It is driven by the adoption of silicone potting compounds in various consumer electronics and electric vehicles. The ongoing R&D activities in the silicone potting compounds market have demonstrated the potential of silicone as an excellent potting compound. Silicone potting can be cured quickly in a few seconds, even at room temperature, and enhanced properties of silicone potting, including mechanical strength and protection against vibration and shock, make it suitable for various industrial applications. Moreover, the growing number of new solar projects is further expected to propel the market growth.

The European silicone potting compounds market is dominated by major players such as Henkel AG, Elantas GMBH, and CHT silicone. In addition, the presence of research bodies, such as Silicone Europe, a European cluster alliance for innovative electronics, will positively influence the market demand. The consumption and production of silicone potting compounds are driven by an increase in demand for the automotive industry and the large presence of silicone potting compound manufacturers. Furthermore, the presence of the European Semiconductor Cluster, which involves partnerships with a total of 7 companies and 843 small- and medium-sized enterprises (SMEs), is expected to fuel the demand for potting compounds in upcoming semiconductor projects. Furthermore, new investments in the silicone market and a growing number of startups in Europe are anticipated to create lucrative opportunities in the market.

The LAMEA silicone potting compounds market is largely shared by Brazil and Saudi Arabia. Brazil holds a significant market share in the LAMEA region. The LAMEA market is largely dependent on imports from North America, Asia-Pacific, and European regions. The silicone metal produced in Brazil is exported to the U.S. by the manufacturers such as Dow Corning Brazil and Rima Group, which are used for the production of silicone compounds, including silicone potting compounds. Dow Corning Brazil’s total export of silicone metal to the U.S. is around 80% of the total export. In addition, the large availability of a cheap labor force and close distance to North America make LAMEA suitable for manufacturing silicone potting compounds.

Recent Developments

• July 2021- Dow, a manufacturer of chemicals and materials, is expanding its capacity to support the expansion of its Consumer Solutions business. The organization is expanding its capacity for silicone elastomers and thermally conductive materials, silicone polymers and sealants, silicone-engineered materials and pressure-sensitive adhesives, cationic hydroxyethylcellulose polymers, and polyethylene glycols.
• June 2022- Dymax Corporation, a global manufacturer of chemicals and plastics, will establish a new manufacturing facility in Monroe, North Carolina. More than 100,000 square feet of manufacturing, warehouse, and office space will be constructed by the company in Union County.

Silicone Potting Compounds Market Segmentation

By Curing Techniques

• UV Curing
• Thermal Curing
• Room Temperature Curing

By Application

• Surface Mount Packages
• Beam Bonded Components
• Memory Devices & Microprocessors
• Capacitors
• Transformers
• Cable Joints
• Industrial Magnets
• Solenoids
• Others (Rectifier and Motors)

By End User

• Electronics
• Aerospace
• Automotive
• Industrial
• Others (Optical, Solar Power, and Marine)

By Region

• North America
• Europe
• Asia Pacific
• LAMEA