Synthetic diamonds are emerging as a new front in the geopolitical technology rivalry between China and the United States. As manufacturers explore their use in AI chip cooling, advanced electronics and defence systems, China’s dominance in production, coupled with its tightening export controls, could expose vulnerabilities in critical American industrial supply chains.
Earlier this month, Reuters did a report discussing how China’s synthetic diamond producers are seeking to expand beyond jewellery into semiconductor manufacturing, artificial intelligence (AI) infrastructure and advanced cooling technologies, as falling gemstone prices push companies towards higher-value industrial applications.
For instance, Chinese entrepreneur Feng Canjun, whose factory produces around two million carats of lab-grown diamonds annually, plans to increase the share of output devoted to industrial applications to more than 50% by 2030. Jewellery, which currently accounts for about 70% of production, would fall to no more than 30%, according to Reuters.
China produces approximately half of the world’s synthetic diamonds, with Henan province accounting for around 80% of domestic output. Expanding production capacity has intensified competition in the jewellery market, encouraging manufacturers to seek higher-value industrial uses. Feng told Reuters that industrial diamonds can generate gross profit margins of around 50%, compared with 30% to 40% for gemstone-grade products.
One promising application is cooling AI processors, whose increasingly intensive computing workloads generate substantial heat, making thermal management a growing challenge for semiconductor manufacturers and data-centre operators.
Diamonds have the highest thermal conductivity of any known material, making them a potential material for transferring heat away from electronic components.
Researchers at the Ningbo Institute of Materials Technology and Engineering have developed diamond-copper cooling modules that, according to Reuters, improved heat transfer from chip modules by 80% and increased chip performance by 10%.
Chinese technology companies are also exploring diamond-based cooling solutions. Huawei and Taiwan Semiconductor Manufacturing Company have reportedly investigated the technology, while Lenovo has introduced a laptop in China featuring diamond-copper cooling material.
In the United States, Akash Systems recently delivered diamond-cooled servers powered by Nvidia’s H200 GPUs to Indian data-centre operator NxtGen AI, marking a real-world deployment of the technology. The company says its cooling system can reduce GPU hotspot temperatures by up to 10°C and improve computing efficiency by up to 15% in hot environments.
Other than that, Akash Systems is also offering Diamond-based cooling for AMD’s Instinct MI350 accelerators, extending the technology beyond Nvidia hardware.
Meanwhile, Frore Systems is developing diamond-enhanced liquid-cooling coldplates for next-generation AI accelerators, including Nvidia’s Rubin and AMD’s MI400 and MI500 series. The company claims its technology can improve AI processing efficiency by up to 35%.
Besides having exceptional thermal conductivity, diamond also has an ultra-wide bandgap of 5.47 eV which allows it to operate at extreme voltages, high frequencies, and temperatures which offers synthetic diamonds great opportunities in advanced electronics, radiation detection and quantum sensing.
For instance, synthetic diamonds are already being used in radiation-detection equipment at CERN’s Large Hadron Collider, where chemical vapour deposition (CVD) diamond sensors monitor particle beams and radiation levels. Their ability to withstand intense radiation makes them useful in environments where conventional detectors can deteriorate
In quantum technology, diamond containing nitrogen-vacancy centres is enabling magnetic-field sensing and high-resolution imaging. In November 2025, researchers at IIT Bombay developed an indigenous Quantum Diamond Microscope under India’s National Quantum Mission, with potential applications in semiconductor inspection, materials research and neuroscience.
Diamond-based quantum sensors are also advancing towards portable and space applications. Researchers have demonstrated magnetometers capable of mapping magnetic fields from moving platforms, while NASA awarded funding in 2025 to Advent Diamond to develop diamond-based components for space magnetometry.
In high-voltage power electronics, researchers have demonstrated diamond diodes with breakdown voltages reaching 10 kilovolts, highlighting their potential for power conversion under demanding conditions. However, diamond-based power devices remain at an early stage of development, with manufacturing costs and device performance limiting wider commercial adoption.
Ultimately, it is not impossible that diamond could one day even replace silicon in mainstream CPUs and GPUs, given its exceptional thermal conductivity and ability to withstand voltages and power densities that far exceed silicon’s limits.
However, at this point, it is still a distant prospect because diamond’s superior physical properties alone are insufficient to make it a viable substitute, so, turning this remote possibility into reality will require breakthroughs in wafer production, electrical doping and chip fabrication, alongside substantial reductions in manufacturing costs.
A July 2026 report in Chemical & Engineering News describes more than a dozen companies working to commercialise diamond semiconductor wafers, while highlighting the substantial cost gap with silicon.
The report highlighted several manufacturing milestones, including French company Diamfab’s opening of a pilot facility for diamond semiconductor wafers in Grenoble in 2026 and Japan’s Ookuma Diamond Device completing construction of a dedicated diamond semiconductor factory in May 2026. However, these developments do not mean diamond-based CPUs or AI processors are ready for mass production.
So, in the near term, synthetic diamonds are poised to find significant demand in high-voltage power electronics, extreme-temperature environments, radiation-resistant equipment and quantum technologies, which could provide China that produces roughly half of the world’s synthetic diamond, with another lever in its technological rivalry with the United States and its allies.
So, we are looking at the emergence of yet another geopolitical risk for global technology supply chains.
China’s Export Controls on Synthetic Diamond Technology
Beijing has already begun tightening its regulatory grip on synthetic diamond technology, by having progressively expanded its export controls affecting this industry. On September 15th, 2024, China’s Ministry of Commerce and the General Administration of Customs (MOFCOM) introduced export controls, covering specified equipment and components used to manufacture superhard materials, including synthetic diamonds.
Shortly, thereafter, on December 3rd, 2024, Beijing imposed additional restrictions specifically on exports to the United States, including a general presumption against licensing exports of dual-use items related to superhard materials.
On October 9th, 2025, China announced a further set of controls specifically covering synthetic diamond micropowder, certain single crystals, diamond wire saws, grinding wheels, and specialised manufacturing equipment and technologies. The measures were due to take effect on November 8th, 2025, but their implementation was suspended until November 10th, 2026, following a trade agreement with the United States.
The United States remains significantly exposed to China in the industrial synthetic diamond supply chain, despite having a substantial domestic production base.
The dependence is particularly pronounced in diamond powders, abrasives and other industrial materials used in precision manufacturing. Although these products are not necessarily expensive, they are important inputs for several advanced industrial processes, including semiconductor production, aerospace manufacturing and specialised defence applications.
According to the U.S. Geological Survey’s Mineral Commodity Summaries 2026, China accounted for approximately 77% of U.S.’ imports of industrial diamond bort, grit, dust and powder during 2021–24, making it by far the largest foreign supplier. These figures cover both natural and synthetic industrial diamonds, rather than exclusively the specialised synthetic grades targeted by Beijing’s controls.
The exposure is also evident in trade figures for diamond dust and powder. In 2024, the United States imported approximately $46 million worth of these products, with China supplying around $27.6 million, or roughly 60% of the import value. Although the figures do not isolate every grade or industrial application, they illustrate the importance of Chinese suppliers to the American market.
It is not possible to establish what proportion of military equipment production relies on Chinese-origin synthetic diamonds based on the publicly available US procurement data, however, synthetic diamonds do have several applications relevant to the US defence industry.
For instance, let us take China’s October 9, 2025, announcement introducing additional export controls on synthetic diamond products and manufacturing technologies. The measures cover synthetic diamond micropowder with an average particle size of 50 micrometres or less; certain single-crystal diamonds measuring more than 50 micrometres and up to 500 micrometres; specified diamond wire saws and grinding wheels; and equipment and process technologies used in diamond manufacturing through the DCPCVD method.
Diamond abrasives and cutting tools are used in precision machining, grinding and polishing of hard materials and specialised components. These processes support manufacturing across the aerospace and defence sectors. Diamond’s exceptional thermal conductivity also makes it attractive for removing heat from high-power electronic components, including systems used in radar and other advanced military equipment.
Other than that synthetic diamond sensors are also used in high-radiation scientific environments, including experiments at CERN’s Large Hadron Collider as stated earlier. Their ability to withstand radiation makes them potentially useful for specialised detection and monitoring applications.
Restrictions on diamond micropowder, wire saws and grinding wheels could make precision cutting, grinding and polishing more expensive or difficult for manufacturers. Such materials are used in processing hard substances and specialised components, including those relevant to semiconductor and electronics manufacturing.
Disruptions could lead to longer procurement times, higher input costs and delays for companies dependent on particular grades or specifications.
Controls on DCPCVD equipment and manufacturing technologies could create a longer-term challenge. They cover not only the finished material, but also specialised equipment and technical processes required to produce it. This could complicate efforts by American companies and research institutions to expand domestic synthetic diamond manufacturing capacity, particularly as interest grows in diamond-based thermal management, high-power electronics and advanced semiconductor applications.
So, the implications are therefore relevant not only to existing industrial supply chains but also to technologies that the United States is seeking to develop.
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Having said that, it is important to bear in mind that China’s restrictions would not suffice to bring American semiconductor or defence production to a halt. The United States has an established domestic synthetic diamond industry, while South Korea, Ireland and other countries provide alternative sources of industrial diamonds.
Manufacturers could also seek to diversify suppliers, increase domestic production or adapt processes where substitutes are technically viable. However, replacing Chinese supply may prove difficult for specialised grades and manufacturing equipment, particularly if alternative producers lack the capacity to meet demand immediately.
Tanmay Kadam is a geopolitical observer based in India. He has experience working as a Defence and International Affairs journalist for EurAsian Times. He can be contacted at tanmaykadam700@gmail.com.