Analog computing from recycling principle for next circular economy scenario has been studied with an iron oxide-coupled graphite/Fe–Si steel structure which was built using recycled waste materials, such as lead pencil and 3% Si steel (Fe–Si steel) foils. Proximity phenomena, such as disordered structure of iron oxide and magnetostriction-induced conduction, inside graphite lattice resulted in functional properties to advance analog architectures. Thermal oxidation was the synthesis route to produce iron oxide as coating film on Fe–Si steel foil, whose structure properties were validated by Raman spectroscopy where phase formation of hematite, α-Fe2O3, resulted as iron oxide thin-film. Three graphite layers with different compositions were also analyzed by Raman spectroscopy and used for studying electrical conduction in Fe–Si steel/α-Fe2O3/graphite structure from current–voltage plots at room temperature.