"The compound behind silly putty’s unusual characteristics is polydimethylsiloxane.
This clear organic polymer has a relatively simple repeating section of C2H6OSi and forms the simplest of the family of polymerised organo-silicon compounds that are loosely referred to as silicones. Although it’s not the compound’s main application, polydimethylsiloxane, or PDMS for short, does turn up in the most immediate association many members of the public have with ‘silicone’, as the viscous liquid filler of breast implants.
Although it is by no means the only substance in silly putty, with the main component being dimethylsiloxane, PDMS remains the substance that defines its behaviour. The product was originally developed following the rubber shortage during the second world war when many synthetic alternatives were researched, though it was not until the 1960s that both silly putty and PDMS began to be widely available.
The production of the compound begins with methyl chloride and silicon which are reacted together in a heated chamber, catalysed by copper oxide, to produce dimethyldichlorosilane, which is then reacted with water in a polymerisation process to produce PDMS. Variants of the procedure are used to produce different viscosities of material, from short chained liquids to long chained rubbery solids."
See more @ Chemistry World
More Info..