China's lab-grown diamond industry targets AI and semiconductor sectors

Chinese lab-grown diamond producers, who currently account for approximately half of the global supply, are shifting their focus from the jewelry market toward high-tech industrial applications. As competition intensifies and gemstone prices face downward pressure, manufacturers are looking to supply advanced materials for semiconductors, AI servers, and quantum technology.

Entrepreneurs in the sector aim to pivot significantly by 2030. For instance, Feng Canjun, a factory owner producing 2 million carats annually, intends to increase the share of products used for functional materials to over 50%, while reducing jewelry-grade output to a maximum of 30%.

This transition carries geopolitical implications for the US-China technology rivalry. If synthetic diamonds become integral to thermal management in AI infrastructure and semiconductor manufacturing, China's production dominance could represent a strategic supply-chain vulnerability for the United States. Analysts note that the demand for improved electronic performance and data center cooling, driven by the AI surge, makes this a defining structural shift for the global technology supply chain.