What is a sunset industry? Sunset industry is an image term for traditional industrial sectors that tend to decline, referring to industries where the total sales volume of products decreases absolutely or growth slows down in a regular manner over a sustained period of time. Its basic characteristics are a slowdown or stagnation in demand growth, and the industry's rate of return is lower than the average of various industries, showing a downward trend. The comprehensive characteristics are: 1. Low price elasticity of the product, 2. Excess production capacity, 3. Insufficient demand, 4. Insufficient technological iteration. Whether the silicon dioxide industry belongs to the sunset industry needs to be comprehensively evaluated based on its technological upgrading, market demand, and policy orientation, and the current industry shows obvious structural differentiation characteristics. 1、 Industrial characteristics: 1. Low end overcapacity, high-end dependence on imports: China's capacity utilization rate of precipitated silica has been below 79% for a long time (international surplus standard), resulting in an oversupply of low-end products, but the high-end market (such as special rubber and electronic materials) still relies on imports. However, gas-phase silica (such as hydrophobic white carbon black) has not yet shown a significant surplus due to its high technical threshold. 2. There is significant differentiation on the demand side: traditional applications (tires, shoes) have slowed down in growth, but demand in emerging fields such as new energy (photovoltaic film, lithium battery separator) and semiconductors is rapidly increasing. 3. Technological upgrade pressure: High end nanoscale silica (such as gas-phase products) relies on imported equipment, with a localization rate of less than 30%, and key technologies are constrained by European and American companies. 4. The tightening of environmental policies, such as the treatment of new pollutants, has forced enterprises to transform high energy consuming production lines, resulting in high transformation costs. 5. Intensifying market competition: Leading companies such as Evonik and Cabot monopolize the high-end market through patented technology, while domestic enterprises are concentrated in the mid to low end sectors. 6. There is overcapacity in the production of precipitated silica, with a capacity utilization rate of only 71% in 2023, increasing the risk of price wars. 7. Risk of raw material fluctuations: The prices of raw materials such as quartz sand and soda ash are affected by the international energy market, with a cost increase of over 15% in 2024, squeezing profit margins. 2、 Conclusion: Atypical sunset industry 1. Low end sector: conforms to the characteristics of sunset industries (overcapacity, shrinking demand, etc.). ① High resource dependence: Traditional production relies on mineral resources such as quartz sand, and high-quality resources are gradually becoming scarce. Uneven regional distribution leads to unstable supply. ② Low industrial concentration: Enterprises are generally small in scale, and it is difficult to form a synergy between resource allocation and technological innovation. ③ Overcapacity and low-end competition: Overcapacity in the mid to low end leads to price wars and compresses corporate profit margins. ④ High energy consumption: The production process consumes a lot of energy, which contradicts the requirements of sustainable development. ⑤ Pollutant emissions: Improper treatment of exhaust gas, wastewater, and waste residue during the production process can pollute the environment. ⑥ Carbon emissions issue: High temperature calcination and other processes are accompanied by high carbon dioxide emissions. 2. High end field: belongs to the technology driven sunrise industry, relying on innovation to break through market bottlenecks. ① Insufficient high-end product technology: The production technology threshold for high-purity and high-performance products is high, and domestic enterprises are relatively lagging behind. The high-end market relies on imports. ② In the field of gas-phase silicon dioxide, traditional strong countries such as Germany, the United States, and Japan still occupy the majority of the global market share, while Chinese enterprises still lack competitive advantages in single set production capacity, process automation, and other aspects. 3、 New markets and policy opportunities: 1. Emerging market demand explosion: In the field of new energy, modified silica can be used as a solid electrolyte additive to enhance lithium ion conductivity and inhibit dendrite growth. As a positive electrode coating layer in sodium ion batteries, it improves cycling stability. ② Semiconductor industry: As the core material of low dielectric constant thin films, used for chip interconnect layers, it can reduce signal delay and improve energy efficiency. As an insulating layer in third-generation semiconductors, it has better high-temperature stability than traditional oxides. ③ Targeted drug carrier: mesoporous silica nanoparticles (MSNs) are used for cancer treatment to achieve synergistic drug release and magnetic hyperthermia. ④ Environmental remediation: Hydrophobic silica is used for oil adsorption, and its efficiency in treating offshore oil spills is 30% higher than traditional materials. Fixed enzyme carrier for the degradation of organic pollutants in industrial wastewater. ⑤ Intelligent material: temperature sensitive silicon dioxide gel is used for robot tactile sensor. ⑥ Aerospace: lightweight silica aerogel as thermal insulation layer of spacecraft. 2. Key Policy 1: Energy Efficiency Improvement and Green Transformation ① The Ministry of Industry and Information Technology's "Action Plan for Industrial Energy Efficiency Improvement" clearly requires accelerating the innovation and upgrading of key silicon materials and promoting low-carbon transformation in high energy consuming industries. ② The Action Plan for New Pollutant Control issued by the Ministry of Ecology and Environment strengthens the investigation of chemical substance environmental information and standardizes the emission standards for silica production. ③ Collaborative development of industrial chain: Policy support for optimizing the quality of upstream raw materials such as quartz sand and soda ash, ensuring the stability of midstream precipitation method silica production. 2. Differentiated layout of local policies ① Henan: released the "Action Plan for Leading the Way in Material Industry Advantage Reconstruction", focusing on the development of advanced basic materials, including high-end silicon dioxide. ② Other provinces: Guide enterprises to transform into high value-added products such as coatings and batteries through local industrial funds, tax incentives, and other policies. 4、 Technological breakthrough space ① New processes such as sol gel method can reduce the production cost of nano silica and improve the product purity. ② The potential application of modified technologies, such as hydrophobic fumed silica, in the fields of medicine and environmental protection is yet to be explored. ③ Collaborate with research institutions to tackle the preparation technology of nanomaterials and seek support from national special funds. ④ Differentiated layout for high-end applications (such as electronic and pharmaceutical grade) to avoid homogeneous competition. The silicon dioxide industry is currently undergoing a period of transformation and upgrading. Although it faces multiple challenges such as resources, environmental protection, and technology, it has broad prospects for future development driven by the expansion of emerging applications and technological innovation. Enterprises need to seize opportunities and respond to challenges in order to stand undefeated in the fierce market competition.