LAB-grown diamonds, long synonymous with jewellery, are finding an unexpected second market as cooling components in artificial intelligence semiconductors, driving sharp share price gains among Chinese producers, according to a report by Bloomberg News.
The shift follows commercial breakthroughs by several Chinese manufacturers, the newswire said. This includes SF Diamond which has begun small-batch shipments of diamond heat spreaders. Another, Henan Liliang Diamond, commenced first-phase production of a high-power heat spreader project, said Bloomberg.
Diamond’s exceptional thermal conductivity makes it well-suited to managing heat in ever-denser chip designs. Analysts at Huayuan Securities say diamonds in this technology are increasingly regarded as superior to copper or aluminium.
Investors have taken notice. Zhecheng Huifeng Diamond Technology and SF Diamond jumped 51% and 40% respectively last week, dwarfing the CSI 300’s 1% advance, Bloomberg reported. By contrast, traditional cooling material plays have lost ground — Aluminum Corp of China and Jiangxi Copper are both down roughly 25%-28% from January highs in Hong Kong.
The rotation reflects a maturing AI trade. After two to three years of heavy positioning in core hardware – printed circuit boards, optical modules and the like – many funds are now hunting for less-crowded opportunities with stronger supply constraints and pricing power, said Nomura’s China tech analyst, Duan Bing.
“Supply chain research needs to keep going deeper,” he said.
