The heat dissipation bottleneck in AI computing infrastructure is shifting the narrative for lab-grown diamonds from a "love story" to a "computing logic." On May 28th, the Wind Lab-Grown Diamond Index surged over 13% in a single day. Sf Diamond Co.,Ltd. and Henan Huanghe Whirlwind Co.,Ltd. hit their daily price limits, while another related stock soared more than 20%. Zooming out, the index has accumulated a gain of 87% year-to-date. The core driver of this rally is no longer jewelry consumption; instead, the capital market is beginning to reprice the industrial properties of diamond. Huaan Securities Co.,Ltd. points out that as AI chip power consumption and heat flux density continue to rise, traditional cooling solutions are nearing their limits. Diamond, with its ultra-high thermal conductivity, is beginning to enter high-end chip thermal management systems. A report from the institution in January stated that diamond's natural thermal conductivity is as high as 2000-2500W/(m·K), approximately 4 times that of copper and 8 times that of aluminum. This means that under the same conditions, diamond's cooling efficiency far surpasses that of traditional materials, potentially breaking through the current physical bottleneck of chip heat dissipation. Simultaneously, narratives around the NVIDIA supply chain are further strengthening market expectations. In February, NVIDIA announced that its next-generation GPUs would adopt a "diamond composite material + liquid cooling" thermal solution. Jensen Huang has also engaged in industrial discussions with Chinese companies specializing in diamond thermal management materials.
AI Chips are Hitting the "Thermal Wall" The core challenge for AI chips is becoming increasingly direct: greater computing power leads to higher power consumption, and higher power consumption pushes heat dissipation closer to the performance ceiling. Huaan Securities Co.,Ltd. notes that with increasing chip integration and miniaturization, chip performance continues to improve, but power consumption and heat generation rise concurrently. Related research indicates that for every 18°C increase in the operating temperature of a semiconductor component, its failure rate increases by 2 to 3 times. This means high temperatures not only degrade chip performance but also shorten device lifespan, posing safety risks and causing additional energy consumption. In some high-performance scenarios, chip heat flux density has already reached 150W/cm², and in applications like airborne radar, it can be as high as 10¹⁰W/cm². In recent years, the AI industry chain has significantly increased its focus on thermal management. From air cooling to liquid cooling, from heat pipes to vapor chambers, the entire industry is searching for more efficient cooling solutions. The problem, however, is that traditional materials are gradually approaching their physical limits. While air cooling is low-cost and structurally simple, its effectiveness in high-load AI chip scenarios is becoming increasingly limited. Liquid cooling, though more efficient, ultimately still requires superior thermal conductive materials as a foundation. It is precisely for this reason that the market is beginning to re-evaluate diamond, a material long overlooked in this context.
Why Diamond is Suddenly the "AI Material" The core logic of this market trend is that diamond's thermal conductivity far exceeds that of traditional cooling materials. Data from Huaan Securities Co.,Ltd. shows that diamond's natural thermal conductivity reaches 2000-2500W/(m·K), about 4 times that of copper and over 8 times that of aluminum. Previous industry information also indicated its thermal conductivity is approximately 5 times that of copper and 10 times that of silicon. More critically, diamond is not only a "fast conductor" of heat but also offers better "thermal matching." A significant issue with traditional cooling materials is that after prolonged thermal cycling of chips, different materials expand and contract at different rates, easily leading to interface delamination and reduced reliability. Diamond's coefficient of thermal expansion is only 1.0-1.5×10⁻⁶/K, highly compatible with core semiconductor materials like silicon and silicon carbide. This means that even after tens of thousands of temperature cycles, a diamond heat sink can maintain interface stability, helping to address the heat dissipation reliability issues in high-power chips during long-term operation. Consequently, diamond is transitioning from a traditional industrial material into semiconductor packaging and heat sink systems.
NVIDIA Ignites the Narrative, Lab-Grown Diamonds Face a "Computing Power Revaluation" The catalyst that rapidly accelerated this logic was NVIDIA. In February, NVIDIA's announcement that its next-generation GPUs would adopt a "diamond composite material + liquid cooling" thermal solution became a significant catalyst for this round of activity in the lab-grown diamond sector. According to disclosures from diamond material company "Superwin Diamond," its developed diamond-copper composite material has passed NVIDIA's supply chain verification and can be used to address the high-power-density heat dissipation problems of AI chips. Previously, during Jensen Huang's first visit to China in 2026, he also discussed the industrialization of diamond wafers with the company's CEO, Zhu Yanhui. Given NVIDIA's dominant position in the AI chip market, this industrial signal quickly amplified the market's imagination regarding diamond-based cooling. TrendForce data shows that NVIDIA's GPU share in the AI server market reached 75.9% in 2025. Simultaneously, China already holds a global production capacity advantage in the lab-grown diamond sector. The "2025 Lab-Grown Diamond Industry Development Report" indicates that global lab-grown diamond rough production capacity is about 40 million carats, with China's capacity at approximately 25.2 million carats, accounting for about 63%. This means that the lab-grown diamond industry, once viewed by the market as suffering from "overcapacity," is now being repriced as part of the AI computing infrastructure chain.
How Far Can the "Cooling Revaluation" Go After the "Consumer Bubble"? In recent years, the lab-grown diamond industry experienced a typical bubble burst: the market once firmly believed it would disrupt natural diamond consumption, but rapid supply expansion and continuous price declines led the industry into overcapacity. This time, however, the market's focus has shifted from "consumption" to "technology." Huaan Securities Co.,Ltd. points out that diamond cooling technology is still in the early stages of development, with potential for expanding applications in the future. Estimates show that under a conservative scenario, the global diamond heat dissipation market size could reach approximately RMB 9.7 billion by 2032, while an optimistic scenario could see it reach RMB 97.4 billion. The market is repositioning diamond from jewelry and industrial materials to high-end thermal management systems for AI chips and semiconductor packaging—this is a valuation re-evaluation driven by a shift in "industrial identity." Market moves are often faster than industrial developments themselves. The current market activity reflects future potential more than realized performance. Technology development, customer verification, and alternative solutions still require time for testing.
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