Side sealing technology is crucial in the twin‐roll casting process. The performance of side dam materials directly determines twin‐roll casting (TRC) process stability and safety. An orthogonal test is conducted to study the effects of thermal conductivity, linear expansion coefficient, and elastic modulus on the maximum thermal stress of side dams. The elastic modulus and linear expansion coefficient are identified as key factors affecting the maximum thermal stress of the side dam. The fluctuation of maximum thermal stress under different elastic modulus and linear expansion coefficients is 79.7 and 75.8 MPa, respectively, whereas it is only 11.2 MPa under different thermal conductivity. A side dam with heterogeneous material along height and thickness gradient is designed. The results indicate that the maximum thermal stress in the contact area between the side dam and the molten metal decreases to 31.2 MPa, representing a reduction of more than 30 MPa compared to the homogeneous side dam with optimal performance. The results provide important guidance in improving the stability of the TRC process.