Dow to Up Supply Chain Resilience with US$100m Investment

Dow has announced plans to invest roughly US$100m through to 2027 to expand its specialty silicones manufacturing across three countries. The investment could strengthen global supply chains for sectors including mobility, electronics and healthcare.

The company operates as the world's largest and most integrated silicones producer. Dow says the investments will expand capabilities in the US, China and Japan to meet demand growth in data centres and semiconductors.

Supply chain expansion plans

Dow will expand liquid silicone rubber manufacturing in Carrollton, Kentucky in the US and Zhangjiagang, China, which it says these facilities will support applications across mobility, electronics and healthcare.

The investment includes capacity expansions for engineered silicone materials scheduled this year in Songjiang, China and Fukui, Japan, while additional expansions in Auburn, Michigan in the US and Zhangjiagang, China are expected in 2027.

These materials are used in power electronics, thermal and electrical protection and semiconductor packaging. 

According to McKinsey, the semiconductor industry was valued in the range of US$630bn to US$680bn in 2024. The consulting firm projects the industry will reach US$1tn to US$1.1tn by 2030. The growth in AI and data centres is fuelling semiconductor demand. The engineered silicon supply chain will be required to support this expansion.

The distribution of its manufacturing sites across multiple regions could reduce supply chain risks.

Regional manufacturing capabilities

"These investments underscore Dow's focus on scaling specialty silicones materials and bringing innovation closer and faster to our customers," says Brendy Lange, President of Performance Materials & Coatings at Dow.

"By expanding manufacturing and innovation capabilities in these strategic regions, we are investing to meet increasing consumer demand, strengthening our global supply chain capabilities, and enabling customers to move faster from innovation to commercialisation."

Dow expanded its Cooling Science Labs in Shanghai, China and Michigan, US earlier this year as part of the investment programme. The labs support product development for thermal management applications.

The company's multi-region manufacturing strategy could allow customers to source materials closer to their production sites and, as a result, this approach could reduce lead times and transportation costs in the supply chain.

Market demand across sectors

According to Fortune Business Insights, the global silicones market size was valued at US$21.6bn in 2025. The research firm projects the market will grow from US$22.9bn in 2026 to US$34.7bn by 2034, exhibiting a compound annual growth rate of 5.3%.

Demand for specialty silicones continues to grow faster than GDP. This growth is linked to demand in microelectronics, energy electronics, consumer electronics components and mobility applications.

The supply chain for specialty silicones serves multiple industries. Material shortages in this sector could affect production timelines across electronics and automotive manufacturing.

Dow says its expanded capabilities will support growing demand for silicone solutions used in mobility intelligence modules. These materials are required for manufacturing advanced driver assistance systems, providing stability to secure and protect components.

Automotive supply chain requirements

Silicone materials are used in advanced driver assistance systems. According to a report from Moody's, the average modern car now carries more than 1,700 semiconductors.

According to Fortune Business Insights, the global automotive advanced driver assistance systems market size was estimated at US$68.26bn in 2025. The research firm projects the market will reach US$79.25bn in 2026 and US$261.62bn by 2034.

The automotive supply chain requires specialised materials to meet reliability standards. Silicone components protect semiconductor systems from thermal stress and physical damage.

Dow's investments across three countries could provide automotive manufacturers with alternative sourcing options. This geographical distribution could support supply chain continuity in the event of regional disruptions.