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• FeSiCr soft magnetic composites were fabricated by pyrolysis of magnesium acetate. • The formation process of insulation layer was explored. • The effect of magnesium acetate tetrahydrate content on the microstructure and magnetic properties was investigated. • MgO as an insulating layer are beneficial for reducing core loss and improving frequency stability to 10 MHz. In this study, FeSiCr soft magnetic composites with magnesium oxide insulating layer were successfully prepared by the evaporation and thermal decomposition of magnesium acetate tetrahydrate. The microstructure and thermal analysis show that magnesium acetate coated on the surface of the magnetic powder can be decomposed into the magnesia insulating layer basically by heating above 400°C. With the increasing concentration of magnesium acetate tetrahydrate, the thickness of the insulating layer increases gradually. The effect of layer thickness on the microstructure, density and magnetic properties of the core was also investigated. The results show that with the magnesium acetate tetrahydrate content ranging from 0 to 8 wt%, the demagnetization field and inter-particle eddy current in SMCs are affected by the thickness of the insulating layer, which leads to the permeability and total loss of the core decreasing, and the frequency stability and DC bias performance improving. Moreover, the process of thermal decomposition plays the role of annealing the composite powder and releasing the stress in the magnetic powder, which reduces the coercivity of magnetic core. This method provides a new insulating strategy for obtaining high quality soft magnetic composites applied to high frequency. [ABSTRACT FROM AUTHOR]