To The Moon

Diamonds fascination.

In the 1953 Hollywood movie “Gentlemen prefer blondes”, movie legend Marilyn Monroe sang “Diamonds are a girl’s best friend” and 32 years later in January 1985, Madonna paid an hommage, replicating the entire musical set in her MTV video “Material girl” - dripping in diamonds, of course !

Diamonds have long captivated women as the ultimate symbols of love & status, a fascination fiercely guarded for decades by the De Beers cartel through strict supply control and brilliant marketing of “a diamond is forever”.

This historic monopoly shattered with the rise of lab-grown diamonds, that offer chemically identical stones with superior ethical and financial appeal.

By making diamond luxury highly accessible, lab-grown gems permanently disrupted De Beers' dominance and forced the industry titan to adapt to a new, democratized market.

Do you know that around 70% of the 2 million carats of lab-grown diamonds produced annually at Feng Canjun's factory (Jiaruifu Diamond) in China, currently go into jewellery industry ?

Now, entrepreneur is betting that the future of ​China's synthetic diamond industry lies in supplying advanced materials for semiconductors, AI servers & other high-tech applications.

According to Jiaruifu Diamond, Founder, Feng Canjun:

• He is looking to raise the share of his lab grown diamons to be used in functional materials to more than 50% by ‌2030.

• Doing so, it means he would reduce the share going to the jewellery sector to a maximum of 30%.

China's lab-grown diamond producers, that account for around ½ of the world's supply, are looking beyond gemstones as competition intensifies and prices come under pressure.

The shift could give the industry greater strategic significance in the US-China technology rivalry.

If synthetic diamonds become more widely used in semiconductors and thermal management in AI infrastructure, China's production dominance could emerge as another supply-chain vulnerability for the US.

According to consultancy, Ken Research, Engagement manager, Manan Goenka:

• The transition is now the defining structural story in the diamond industry.

• One with direct implications for ​global technology supply chains.

• The broader implication is that synthetic diamonds could increasingly become part of the strategic trade-policy conversation surrounding ⁠semiconductors, rare earths ​and advanced manufacturing. 

Companies and analysts say demand from sectors including chips, thermal management and quantum technology could become the industry's next major growth engine, with synthetic diamonds ​prized for properties that can improve the performance of advanced electronics and computing systems.

The move comes as AI drives a surge in demand for data centre capacity.

In a 2025 report, the International Energy Agency ⁠(IEA) said that data centre electricity consumption is projected to more than double by 2030 to about 945 terawatt-hours.

This is roughly equivalent to Japan's annual power consumption, with AI being the main driver.

China's lab-grown diamond market 2022-2028

While gem-grade diamonds for jewellery remain a much larger market, manufacturers are placing bets on new industrial uses related to AI & semiconductors.

The market for these higher margin products is small, but growing. (see above)

AI chip - Thermal management

The AI’s Fallout Opportunity.

Thermal management is viewed by analysts ​as a nearer-term opportunity, while the use of diamonds as a semiconductor material is further away from widespread commercial adoption.

Chip applications also require much higher purity and tighter manufacturing standards than diamonds used in cutting and drilling tools.

Interest from some ​of the world's biggest technology companies points to the potential for chip applications to become a new source of demand as AI computing generates increasing amounts of heat.

Chinese media have reported that Huawei and $Taiwan Semiconductor Manufacturing(TSM)$, are exploring synthetic diamonds for chip cooling, while $LENOVO GROUP(00992)$ has launched a consumer laptop in China that it says uses a diamond-copper cooling material.

In June 2026, $Intel(INTC)$ CEO Lip-Bu Tan said he personally invested in Diamond Foundry, a lab-grown diamond maker developing chip-grade diamond wafers.

Huawei, Lenovo and Intel did not respond to requests for comment. TSMC declined to comment.

Is global news agency Reuters, on to something here ?

Some Chinese producers are beginning ​to invest in anticipation of demand.

According to a June 2026 filing, $Henan Liliang Diamond Co.,Ltd.(301071)$ plans to redirect 1 billion yuan ($149.18 million) in funds originally raised to expand gem-grade diamond production to a new functional-diamond project.

According to the Ningbo Institute of Materials Technology & Engineering, in April 2026, diamond-copper cooling modules developed by Chinese ​researchers improved heat transfer from chip modules by 80% and raised chip performance by +10%.

Wider adoption could reshape the market for thermal-management materials that are used to stop chips from overheating.

Germany's Henkel (HNKG.DE), US chemical firm $Dow Chemical(DOW)$, and Japan's Shin-Etsu ⁠Chemical (4063.T), sell products used to dissipate heat from chips.

Diamond heat spreaders could compete with some existing materials if adopted widely in AI chips and data centres.

Henkel, Dow and Shin-Etsu did not respond to requests for comment.

Rise of Synthetic Diamond wafers ?

Related diamond-enabled products are also being explored outside China.

In June 2026, De Beers' synthetic-diamond & advanced-materials business Element Six and Japan's Orbray said they had produced 3-inch single-crystal diamond wafers and were preparing 2-inch wafers for production in Oregon.

Incidentally, the Spanish government is investing €753 million ($868 million) in a Diamond Foundry plant in Trujillo that will make synthetic diamond wafers.

If completed, it would be Europe's first large-scale producer of diamond substrates, a material for semiconductor manufacturing. 

In early October 2026, Frore Systems, a US thermal-management company, unveiled, opens LiquidJet Diamond, a multi-stage coldplate with an integrated diamond spreader.

According to independent diamond consultant Robert Bouquet:

• The scope & ​potential in the technology and industrial sectors could be significantly ​above the retail diamond jewellery business, that by itself is ⁠already an approximately $100 billion a year.

The Diamond Factory.

Feng's Jiaruifu Diamonds factory is one of hundreds of lab-grown producers clustered in the central province of Henan, that accounts for 80% of China's synthetic diamond output.

Lab-grown diamonds are made in machines that replicate the high-temperature, high-pressure conditions under which natural diamonds form. They are physically identical to mined diamonds.

One machine in Feng's factory can ​produce 120 carats of rough diamonds in 6 days, shortening a process that takes billions of years naturally.

Feng has 550 such machines, each costing about 3 million yuan and ​weighing more than 100 tons.

They ⁠have enabled him to increase annual output tenfold since launching the business in 2019, to 2 million carats in 2025, equivalent to about 9% of De Beers' production last year.

Since 2024, Beijing has already moved to incorporate the technology into its export control regime, placing related machinery and key components under restrictions.

In 2025, it added more synthetic diamond products, to its list though implementation was postponed for a year under a US-China deal reached last October.

China’s diamond output by 2030.

Lab-grown diamond prices have fallen sharply as producers, particularly in China, have added capacity.

China's output is projected to grow from 28 million carats in 2025 to 52 million carats by 2030. (see below)

China's rapid expansion of lab-grown diamond production has helped drive down prices, increasing pressure on producers to find higher-value applications.

According to Feng:

• Gross profit ​margins for gem-grade diamonds are 30% - 40% .

• For industrial diamonds, the margin is about 50%.

• As a result, Feng plans to shift more production towards higher-value industrial uses, rather than further increase output.

Producers remain optimistic about commercial potential of synthetic diamonds in advanced industrial applications.

Although this potential remains uncertain and risks contributing to another bout of Chinese industrial overcapacity, Feng stated that it will be a billion- or even trillion-yuan market.

Consequently, they are strategically expanding into next-generation applications to replace traditional ones.

What are the odds of success for a girl’s best friend in the industrial sector ? What do you think ?

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