AbstractAmine‐terminated poly(dimethylsiloxanes) (ATPDMS) were used to improve the toughness of a cresol‐formaldehyde novolac epoxy resin cured with a phenolic novolac resin for electronic encapsulation application. The effect of molecular weight of amine‐terminated polysiloxanes on the phase separation of the resultant elastomers from epoxy matrix were investigated. Mechanical and dynamic viscoelastic properties of siloxane‐modified epoxy networks were also studied. The dispersed silicone rubbers effectively improve the toughness of cured epoxy resins by reducing the coefficient of thermal expansion and flexural modulus, while the glass transition temperature was hardly depressed. Electronic devices encapsulated with the dispersed silicone rubber‐modified epoxy molding compounds have exhibited excellent resistance to the thermal shock cycling test and have resulted in an extended device