The major method used to reduce the magnetic loss of soft magnetic composites (SMCs) is to coat the magnetic powder with an insulating layer, but the permeability is usually sacrificed in the process. In order to achieve a better balance between low losses and high permeability, a novel photodecomposition method was used in this study to create a ZnO insulating layer. The effect of the concentration of diethyl zinc on the formation of a ZnO insulating film by photodecomposition was studied. The ZnO film was best formed with a diethyl zinc n-hexane solution at a concentration of around 0.40 mol/L. Combined with conventional coupling treatment processes, a thin and dense insulating layer was coated on the surface of iron powder in situ. Treating the iron powder before coating by photodecomposition led to a synergistic effect, significantly reduced core loss, and the effective permeability only decreased slightly. An iron-based soft magnetic composite with a loss value of 124 kW/m3 and an effective permeability of 107 was obtained at the frequency of 100 kHz and a magnetic field intensity of 20 mT.
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