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The compound of a racing tyre describes the particular blend of materials that went into its construction. Over 150 different components are used in the manufacture of F1 tyres but the main ingredients are rubber, carbon and mechanical oil. Varying the relative amounts of these three components will produce different tyre compounds, which will each have different characteristics.
For more details of the manufacturing process of F1 tyres, click here.
Much development work is carried out by the tyre manufacturers (Bridgestone and Michelin) into their tyre compounds but it can often be a hit-and-miss affair (it has even been referred to as striking black gold). This is why the recipes for tyre compounds are such closely guarded secrets.
Compounds are often described in terms of their "hardness" or "softness". This does not mean literally how hard the tyres are to touch, but describes how the tyres behave on the racetrack. Harder compound tyres will be more durable than softer compound tyres, meaning that the driver can complete a greater number of laps before the tyres lose performance and they are forced to make a pit stop. However, the harder compounds will provide less grip than the softer compounds, meaning that the driver will not be able to go as fast on each of the laps they make. The choice of tyre compound is therefore a compromise between durability and grip. Choose hard and you'll be able to stay out longer than your competitors. Choose soft and you'll have to pit earlier in the race but you'll be going faster than they are and may be able to make up the difference!
The physical explanation of the difference between the hard and soft compounds is the degree to which the rubber molecules interact with the track surface.
The diagram shows how a hard and soft compound tyre interact with the track surface and hence how much grip is generated.
The hard compound tyre has a greater number of cross-links between the long rubber molecules (introduced by Vulcanisation). This restricts the length of the rubber molecule that can interact with the track surface. Less interaction between the rubber molecules and the surface means that the tyre has less grip on the track.
The situation is exactly opposite for the soft compound tyre. It has far fewer cross-links and therefore a greater length of rubber molecule that can interact with the surface. Greater interaction means greater grip.
Note: The above assumes a perfectly smooth tyre and a smooth track surface. In the real world this does not occur and some degree of the "grip" generated by the tyre is a result of the interlocking of microscopic imperfections in both the tyre and track.