Lab-Grown Diamonds Are Cooling AI Chips: Inside China's New Export Boom

China's lab-grown diamond industry is undergoing a dramatic transformation, powered by a surge in jewellery exports and an unexpected starring role in cooling the world's hottest AI chips. The sector is experiencing explosive growth on both fronts at once.

The Export Boom in Numbers

In the first half of 2026, China exported 1.41 billion yuan (roughly US$210 million) of synthetic rough diamonds through the Shanghai Diamond Exchange — a 65.3% year-over-year increase . China now produces over 60% of the world's lab-grown diamonds, and some sources put its share of industrial-grade synthetic diamond output as high as 95% . The US remains the largest jewellery market, accounting for over 70% of global consumption .

More than 40 domestic member companies of the Shanghai Diamond Exchange are now actively producing and exporting synthetic diamonds — over a tenth of the exchange's 400-plus members .

The AI Chip Cooling Revolution

The industry's most powerful growth driver is no longer bridal jewellery — it is the thermal management needs of advanced semiconductors.

Diamond's physical advantage: Lab-grown diamond has the highest thermal conductivity of any known material at 2,000–2,200 W/(m·K), roughly five times that of copper and eight times that of aluminium. Combined with its electrical insulation, diamond is uniquely suited as a heat spreader for high-power AI chips that now exceed 1,000W thermal design power (TDP) .

Industry adoption is accelerating:

• At Computex 2026 in Taipei, MSI unveiled a diamond-based thermal solution for Nvidia's next-generation consumer GPUs, featuring a diamond-copper composite baseplate and diamond-composite thermal pads .
• Intel CEO Lip-Bu Tan publicly stated that the company invested in a synthetic diamond wafer firm for chip packaging thermal management .
• In March 2026, an undisclosed US buyer placed a $300 million order for AMD Instinct MI350X GPUs cooled with lab-grown diamonds .

Market reaction has been dramatic:

• The lab-grown diamond sector index surged over 71% in the first five months of 2026 .
• Leading Chinese producers voluntarily raised rough prices by roughly 15% in March 2026, breaking a multi-year streak of price declines .
• One Chinese producer, Liliang Diamond, projected H1 2026 net profits nearly triple those of the same period last year, citing breakthroughs in thermal-grade diamond materials .

Cautious Context: A Boom Still in Progress

While enthusiasm is high, not all producers are seeing immediate commercial impact. In June 2026, Liliang Diamond told the stock exchange that diamond thermal materials have "not yet reached the stage of large-scale commercialization" and have had "no material impact" on revenue. SF Diamond disclosed one overseas client and said the bottleneck is simple: not enough orders yet . This suggests that while the technical and strategic direction is clear, the revenue from AI cooling is still in its early stages.

Dual Growth Trajectory

Industry executives describe two distinct growth curves. Jewellery is the established base — and it continues to expand as consumer acceptance of lab-grown diamonds grows in Western markets . But the "second growth curve" — synthetic diamonds used in integrated circuits, AI computing, high-power lasers, high-frequency filters, and quantum technology — is widely expected to become far larger .

As one Chinese industry executive put it, diamond's thermal performance is multiple times that of copper, meaning it can dramatically lower hotspot temperatures in chips and phone chargers, thereby improving chip performance and charging efficiency .

In short, China's lab-grown diamond industry is no longer just a jeweller's story. It has become a materials-science enabler for the AI age — and the numbers show it.