Beijing. Big news is coming from the world of artificial intelligence (AI). China has taken a historic step to tackle the growing problem of overheating in advanced AI chips and supercomputers. Chinese scientists and tech companies have begun mass industrial production of lab-grown synthetic diamonds. These diamonds are now being used as heat spreaders to cool next-generation superchips, rather than as jewelry.
The move from the jewellery market to the tech industry
Due to global oversupply, lab-grown diamond prices have seen a significant decline in recent years. To overcome this downturn, China’s leading diamond producing companies—such as SF Diamond and Henan Liliang Diamond—have completely transformed their business models. These companies have diversified funds and resources from their jewelry factories into high-end AI chip thermal management projects. According to recent reports, due to this unprecedented demand for AI hardware and data centers, China’s lab-grown diamond exports have recorded a record-breaking 65.3 percent increase in the first half of 2026.
Why did diamond become the savior of AI chips?
According to experts, traditional cooling materials like copper and aluminum have reached their thermal limits. Cutting-edge AI graphics processors from companies like NVIDIA generate so much heat during processing that conventional cooling systems are finding it difficult to handle them. Diamond has emerged as the most accurate and precise solution to this problem.
Unprecedented Thermal Conductivity
According to experts, diamond is the world’s most powerful natural thermal conductor. It can absorb and dissipate heat five times faster than copper and 10 times faster than silicon. Research shows that diamond wafer-based cooling technology reduces chip temperatures by 15 to 20 degrees Celsius. This reduction in temperature has directly resulted in a 10 percent improvement in computing capacity. Furthermore, this technology will significantly reduce the massive power consumption required to keep chips cool in data centers.
China’s technological edge
China’s leading edge in producing 8-inch diamond wafers is primarily due to its manufacturing capabilities. Chinese researchers have successfully expanded the size of single-crystal diamond wafers from a few millimeters to 8 inches, or approximately 20.3 cm. Manufacturing diamond wafers of such a large size was once considered extremely difficult for the semiconductor industry, but China has now made it possible on a commercial scale.
Not just AI, these sectors will also make a splash
Market experts believe that this industrial use of lab-grown diamonds will not be limited to AI chips. China is also expanding this technology into other important sectors such as electric vehicles (EVs), 6G telecom, and aerospace. Experts also say that this move by China will not only strengthen its hold on the global semiconductor supply chain but could also significantly reduce the cost of advanced computing in the future. Tech companies in the US and European countries are also rapidly adopting this diamond-cooling technology.