As AI chip power consumption climbs sharply, traditional metal cooling approaches physical constraints, and diamond fabrication techniques continue to improve, the diamond thermal management sector is poised for its inaugural year of industrial adoption.
Investment opportunities are emerging along two primary tracks: companies achieving early commercial deliveries and those securing significant production capacity positions. First, industry leaders that have already accomplished small-batch heat spreader shipments, developed proprietary equipment, and established leading production scale stand to benefit substantially from surging demand. Second, attention should focus on businesses with superior process technology, large-format manufacturing capabilities, and comprehensive supply chain integration, particularly those accelerating capacity expansion.
Diamond: Superior Carbon-Based Crystal with Value Shifting Toward Functional Applications
Diamond combines nature's highest hardness rating (Mohs scale 10) with exceptional thermal conductivity of 2000-2200W/(m·K), while its thermal expansion coefficient closely matches mainstream substrates like silicon and silicon carbide. The product spectrum spans three tiers: abrasive-grade, gem-grade, and electronic-grade materials. China dominates global synthetic diamond production with approximately 90% market share. While industrial-grade diamonds account for 98.7% by carat weight, they represent 60% of production value, with thermal management grades contributing 22.6%, indicating rapid value migration toward functional applications.
The diamond materials industry is expanding through a gradient structure spanning nine application scenarios, from mature volume products like abrasives and military heat dissipation to batch-introduced consumer electronics and optical modules, and finally to emerging applications including AI server heat sinks, diamond drill bits, and GaN-on-Diamond substrates. Given its exceptional physical properties for AI server thermal management, diamond materials are expected to enter mass production by 2026, representing the largest and fastest-growing incremental opportunity in AI cooling materials.
Industry Assessment: Escalating AI Power Curves Create Expansive Diamond Cooling Potential
Examining Nvidia's AI chip roadmap, power consumption has risen from 700W in the Hopper series to 1200W in Blackwell, and is projected to reach approximately 1800W in the Rubin series, with industry estimates suggesting the Feynman generation could reach 4400W—a more than sixfold increase within four years. The AI cooling architecture follows a hierarchical structure spanning chips, thermal interface materials, heat spreaders, cold plates, and liquid cooling systems. As power curves steepen dramatically, localized chip heat flux has surpassed 500W/cm² and is advancing toward 1000W/cm². Traditional metals like copper (approximately 400W/(m·K)) are approaching their thermal conductivity limits, making diamond—with thermal conductivity five times that of copper—the inevitable choice for next-generation cooling solutions.
Market projections indicate that diamond will progressively replace metal cooling in AI chip lids, heat sink substrates, cold plates, and optical modules. The global diamond thermal management market could reach 115 billion yuan by 2030, representing a compound annual growth rate of approximately 143% from 2027 to 2030, offering substantial headroom and elasticity.
Player Progress: Key Industry Participants Target Commercialization Milestones
By 2026, diamond thermal management is transitioning from sample validation to volume orders, with landmark projects from multiple companies materializing and the industry entering an accelerated commercialization phase. Current development efforts concentrate on cost reduction and equipment advancement. On the cost front, CVD thermal-grade diamond substrates remain priced in the "gram-level" range, nearly an order of magnitude higher than copper or aluminum heat sinks, making equipment depreciation and electricity costs during the growth phase critical reduction pathways. On the process side, MPCVD equipment's large-chamber capabilities and magnetron technology still require breakthroughs, with bonding processes and thermal boundary resistance control representing the most significant gaps between domestic and international players.
The competitive landscape features Element Six in a leadership position, with China, Japan, and the United States engaged in competitive collaboration. Overseas players maintain advantages in single-crystal technology and thermal boundary resistance, while Chinese manufacturers are rapidly closing the gap through polycrystalline capacity, composite processes, and lower electricity costs. As domestic companies accelerate development across the full chain from material growth to post-processing to integrated applications, multiple capacity expansion projects are expected to launch in quick succession. Leveraging the world's largest thermal-grade diamond production capacity reserves and low electricity cost advantages, Chinese diamond manufacturers are positioned for accelerated growth trajectories.
Risk Factors
Key risks include customer validation and bill-of-materials integration falling short of expectations, concentrated production capacity release, elevated energy and equipment costs, international trade and export control measures, and competition from alternative materials and technology routes.
Investment Strategy
Driven by three converging factors—sharply rising AI chip power consumption, traditional metal cooling approaching physical limits, and continuous optimization of diamond fabrication processes—the diamond thermal management industry is entering its inaugural commercialization year. We recommend positioning along two primary themes: first, industry leaders achieving early small-batch heat spreader shipments, proprietary equipment development, and leading production scale; second, companies with advanced process technology, large-format manufacturing capabilities, comprehensive supply chain integration, and accelerating expansion initiatives.
Comments