Silicon Anode Restructuring: CVD Leads Growth

I. Divergence Among Three Silicon-based Routes and Reshaping of Market Share

Silicon-based anodes are mainly divided into three technical routes: silicon oxide, CVD silicon-carbon and milled silicon, which differ significantly in capacity utilization, market share and downstream customer structure. Silicon oxide (silicon monoxide): It still accounts for the largest shipment share among silicon-based materials, yet its output is contracting. The operating rate of upstream silicon monoxide powder plants has declined. Pre-lithiated silicon oxide has further raised its initial efficiency to approximately 90% on the basis of the second-generation pre-magnesium silicon oxide, so the third-generation pre-lithiated silicon oxide achieves better shipment performance. The CVD process is widely regarded as the most promising technology. Many traditional silicon oxide manufacturers have gradually shifted resources toward CVD silicon-carbon, only maintaining existing customers. Its overall operating rate has fallen year-on-year, continuously diverting the original market of pre-lithiated silicon oxide. The growth space of silicon oxide is squeezed by the CVD route, leaving limited room for future increments.

CVD silicon-carbon: The biggest growth driver of the industry, with a notable year-on-year output increase in the first half of the year. At this stage, CVD silicon-carbon has not achieved large-scale mass production, and its market share remains lower than that of silicon oxide. In terms of production capacity, the annualized nominal capacity of CVD silicon-carbon across the industry has exceeded 20,000 tonnes, but the actual output for 2026 is projected to be merely 3,000–5,000 tonnes. CVD silicon-carbon is mainly applied in mobile phones, power tools and two-wheeled vehicles. The prevailing price of CVD silicon-carbon stands at 400,000 RMB per tonne. Its cost mainly comes from porous carbon substrates and silane gas, with raw materials accounting for 80%–90% of total costs. Biomass porous carbon is priced at roughly 150,000–200,000 RMB per tonne, resin-based porous carbon at 300,000–500,000 RMB per tonne, and silane gas, the core raw material for CVD, currently costs around 50,000 RMB per tonne.

Milled silicon (ball-milled silicon-carbon): It holds a low market share with few participants. The mechanical milling process suffers from drawbacks such as particle agglomeration and difficulty in precise particle size control, and its cycle stability is inferior to the CVD route, making it hard to become a mainstream solution.

II. Supply & Demand Analysis: Short-term Support from Consumer Electronics, Breakthrough Pending for Power Batteries

Supply side: Sufficient raw material supply, with capacity investment concentrated on CVD Upstream porous carbon capacity keeps expanding with relatively ample supply, laying a raw material foundation for the capacity expansion of CVD silicon-carbon. The stable supply of silane gas supports the ramp-up of CVD production lines. In contrast, affected by weakening downstream demand, upstream silicon monoxide powder plants have actively cut operating rates, and the silicon oxide sector has entered a contraction cycle. R&D focus of anode material enterprises has collectively shifted to CVD silicon-carbon. With resource reallocation, capital expenditure and R&D investment for the silicon oxide route keep declining.

Demand side: Consumer electronics serves as the primary battlefield for now; mass adoption in power batteries is yet to be realized Current demand for CVD silicon-carbon is mainly driven by high-end consumer electronics, while mass adoption in power batteries has not been achieved. Once breakthroughs are made in the power battery segment, CVD silicon-carbon will see explosive demand growth accompanied by price declines. Silicon oxide and milled silicon rely on existing long-term customers to sustain shipments, with a lack of new orders.

The total output of silicon-based materials rises month by month in Q3, primarily fueled by rising demand for CVD silicon-carbon from inventory preparation for new consumer electronics products. The market originally expected new product launches in September to drive a mild uptick in production scheduling. However, consumer electronics demand this year is markedly weaker than that of last year, while demand for CVD silicon-carbon in high-end consumer electronics has climbed. Looking ahead to Q4, silicon-carbon demand will still be dominated by consumer electronics, and explosive market performance is unlikely.

III. Industry Summary: Technological Iteration Enters Deep Waters; Short-term Focus on Consumer Electronics, Long-term Focus on Power Batteries

The silicon-based anode industry is undergoing a transition between old and new technologies. The substitution of silicon oxide by CVD silicon-carbon represents a medium-to-long-term megatrend, yet there is an obvious time lag in industrialization. The industry is still in the stage of capacity ramp-up, customer verification and continuous cost reduction. Despite the impressive nominal capacity across the sector, effective shipment volume remains limited, and many production lines are still at the sample delivery stage. Silicon oxide retains its existing market with mature technology, while its room for incremental growth keeps shrinking. Milled silicon is positioned as a niche product with little chance of market breakout.

Only when material costs keep falling and cycling as well as expansion performance are further optimized to enable mass adoption in power batteries, will the silicon-based anode sector hit its real inflection point for explosive growth. Before that, the industry will stay in a state of "large nominal capacity, low actual shipments, supported by consumer electronics". Enterprises will compete mainly in three dimensions: customer verification, process stability and integrated raw material cost reduction.

For the coming period, price, production scheduling and shipment data of silicon-based materials need to be closely tracked alongside order changes in high-end consumer electronics. Meanwhile, continuous attention should be paid to sample testing and project approval progress of CVD silicon-carbon in power batteries. These two variables will determine the upside potential of the silicon-based track in the next phase.