1. Tariff barrier escalation: rising costs and pressure to restructure the supply chain
The chain effect of the US tariff increase on Chinese silicone products continues to ferment. On April 11, 2025, the US Customs and Border Protection issued a tariff update guide, clarifying that crystalline silicon solar cell related products are not exempted, indirectly pushing up the cost of silicone raw materials. Data shows that after the United States imposed a 34% tariff on Chinese silicone monomers, the export profit margin of Chinese companies was compressed by about 8%, and some small and medium-sized enterprises were forced to withdraw from the US market.

US local companies face a dilemma: if they continue to purchase Chinese silicone, they need to bear the tariff costs; if they turn to alternative suppliers in Southeast Asia, they need to deal with the risk of quality fluctuations. For example, Momentive plans to increase its local monomer production capacity to 400,000 tons/year by 2026, but the expansion cycle is long and the technical barriers are high, and it is difficult to fill the supply gap in the short term.

2. Dilemma of supply chain diversification: local production capacity gap and technology dependence
The US silicone industry is highly dependent on imports, and local production capacity is seriously insufficient. At present, the United States mainly relies on local companies such as Dow Corning and Momentive, but their production capacity can only meet 30% of domestic demand, and the rest depends on imports. Although the US government promotes the repatriation of the supply chain, local companies face dual bottlenecks of technology and cost in expanding production.

Technology blockade in high-end fields exacerbates the vulnerability of the supply chain. The United States imposes strict export controls on semiconductor-grade silicone materials, resulting in local companies being highly dependent on imports for high value-added products such as electronic-grade silicone oil and functional silane. For example, the electronic-grade silicone oil (purity ≥ 99.99%) required by Apple, Tesla and other companies still mainly relies on the supply of Chinese companies such as Runhe Materials and Huitian New Materials.

3. Geopolitical risks: trade frictions and market access barriers
The United States has included a number of Chinese silicone companies in the Entity List, further exacerbating supply chain uncertainty. Companies such as Hosheng Silicon Industry and Xinjiang Daquan New Energy are restricted from exporting to the United States, resulting in the risk of raw material supply interruption for US photovoltaic module manufacturers. Although some companies have tried to circumvent tariffs through Southeast Asian factories, the United States has imposed 36%-46% tariffs on Southeast Asian photovoltaic products, cutting off low-cost alternatives.

US domestic companies are also facing pressure from anti-dumping investigations. In April 2025, Ferroglobe USA and other companies filed a complaint with the US Department of Commerce, accusing metal silicon imported from Angola, Australia, Laos and other countries of dumping and demanding special tariffs. Although this measure targets metal silicon, it may affect the upstream of the silicone industry chain and aggravate the fluctuation of procurement costs for US companies.