Investment bank Guotai Haitong has released a research report highlighting the extensive applications of diamonds, spanning traditional manufacturing tools for cutting, drilling, and polishing, as well as consumer-grade jewelry and chip heat dissipation. China has long produced over 90% of the world's synthetic diamonds, reaching approximately 16.6 billion carats in 2023.

AI computing heat dissipation is identified as a core new driver for diamond demand, alongside other growth areas such as PCB drill bits, semiconductor tools, diamond dicing blades, thinning grinding wheels, and lab-grown diamonds. The report outlines the key viewpoints below.

Diamonds Possess Multiple Properties, with China as the Top Producer

Diamonds feature high hardness, high thermal conductivity, excellent electrical insulation, full-band high light transmittance, and an ultra-wide bandgap, making them suitable for diverse uses. Natural diamond output is limited, while synthetic production relies on two complementary methods: High Pressure High Temperature (HTHP) for granular single crystals and lab-grown diamonds, and Chemical Vapor Deposition (CVD) for sheet-like functional films. China's synthetic diamond output has consistently exceeded 90% of global production, reaching 16.6 billion carats in 2023.

Raw Materials and Traditional Demand

Diamond products are categorized into single crystals, micro-powders, composites, and lab-grown diamonds, with current demand primarily driven by tool-based processing and lab-grown diamonds. In 2025, the global value of traditional industrial applications is estimated at approximately 5.3 billion yuan (China: 4.8 billion yuan), while the global value of rough lab-grown diamonds is about 5.6 billion yuan (China: 3.5 billion yuan). Traditional abrasive and cutting tool markets are mature with stable volumes and prices, while rough lab-grown diamonds are experiencing price declines (CAGR of approximately 25%) due to capacity expansion.

New Growth Points

1) AI computing heat dissipation is a core growth driver: As thermal flux in high-performance chips rises and traditional copper-aluminum cooling approaches its limits, diamond heat spreaders and heat sinks are achieving a breakthrough from zero to one. The global market size could leap from roughly 300 million yuan in 2025 to a trillion-yuan level by 2030 (CAGR over 200%). Under a neutral scenario, the chip-level diamond heat sink market is forecast at 51.6 billion yuan in 2030, with an optimistic scenario exceeding 100 billion yuan. The diamond-copper liquid cooling solution market is projected at 56.7 billion yuan in 2030 under a neutral scenario. Akash has already delivered commercial diamond cooling solutions for NVIDIA's H200, and Lenovo AI thin laptops, along with the Zhengzhou Supercomputing node, have implemented diamond-copper cooling solutions.

2) PCB drill bits and semiconductor tools: Upgraded computing architectures are driving PCB evolution toward high-end HDI, packaging substrates, and M9+ materials. Traditional tungsten steel drill bits are hitting performance limits, accelerating the verification of diamond-coated and PCD polycrystalline drill bits. The diamond drill bit market is expected to reach 1.55 billion yuan by 2030 (CAGR of 30-40% from 2025 to 2030).

3) Diamond dicing blades and thinning grinding wheels: Precision processing tools for semiconductors are experiencing steady growth, driven by wafer expansion and advanced packaging.

4) Lab-grown diamonds: China's lab-grown diamond market is projected to exceed 102.5 billion yuan by 2030 (CAGR of 9% from 2026 to 2030), with the global market reaching approximately 270 billion yuan. Global production is highly concentrated in China, while consumption is primarily in the U.S., creating a mismatch. Indian import and export data has stabilized and recovered since the second half of 2025, with penetration rates fluctuating upward.

Risk Factors

Risks include intensified competition leading to faster-than-expected price declines in core products, delayed commercialization of diamond applications in AI and other emerging fields, or displacement by superior alternative materials, and slower-than-anticipated development of downstream industries such as AI and lab-grown diamonds.